Euro zone bond yields steady; inflation, rate outlook in focus
(Updates prices, adds quote, context in paragraphs 6 and 10) By Sophie Kiderlin LONDON, Oct 14 (Reuters) — Euro zone bond yields held broadly steady on Wednesday, continuing to stabilise after a period of sharp volatility, with investors cautious ahead of US inflation data due later in the day. Economists expect headline inflation to have accelerated to an annual rate of 3.6% in September due to rebounding energy prices. Investors are hoping to glean clues about the possible interest rate path ahead for the Federal Reserve from the data. "Softer employment data, slower wage growth, and encouraging underlying inflation trends have reduced the urgency for an imminent move. Wednesday’s inflation report will therefore be important in determining whether recent progress is continuing, particularly as tariff, energy, and AI-related price pressures persist," Mark Haefele, chief investment officer at UBS Global Wealth Management, said. Germany's 10-year bond yield, the benchmark for the euro zone, was little changed at 3.4644%. Bonds market participants remain on edge following a global rout in late September and early October. Worries about higher energy prices, rates and inflation sent y
(Updates prices, adds quote, context in paragraphs 6 and 10) By Sophie Kiderlin LONDON, Oct 14 (Reuters) — Euro zone bond yields held broadly steady on Wednesday, continuing to stabilise after a period of sharp volatility, with investors cautious ahead of US inflation data due later in the day. 6% in September due to rebounding energy prices. Investors are hoping to glean clues about the possible interest rate path ahead for the Federal Reserve from the data. "Softer employment data, slower wage growth, and encouraging underlying inflation trends have reduced the urgency for an imminent move.
Wednesday’s inflation report will therefore be important in determining whether recent progress is continuing, particularly as tariff, energy, and AI-related price pressures persist," Mark Haefele, chief investment officer at UBS Global Wealth Management, said. 4644%. Bonds market participants remain on edge following a global rout in late September and early October. Worries about higher energy prices, rates and inflation sent yields higher, with fiscal concerns adding to the storm for more indebted countries.
That included France, where investors are focused on fiscal troubles and emerging political risks ahead of next year's presidential election. The spread between French and German debt, a measure of the premium investors require to lend to France rather than safe-haven Germany, was last at around 136 bps after spiking above 158 bps in early October. 1087%. Speaking at a CNN event in Bangkok, European Central Bank President Christine Lagarde said the current high rate of inflation in the euro zone had been driven "predominantly, but not exclusively" by the surge in energy prices caused by the US-Israeli war on Iran.
While there was no sign yet of "second-round effects" on other prices, the ECB would be looking for "hints," such as trade unions' demands in wage negotiations. ECB Governing Council member Pierre Wunsch meanwhile told Bloomberg News that the central bank would likely have to hike again, but noted high levels of uncertainty. The ECB has raised interest rates twice this year, by 25 bps each time, and money markets were last pricing in another hike by the December meeting. com)