FRANKFURT / LONDON (IT BOLTWISE) – German federal bonds recorded slight price losses at the beginning of the week. The Euro Bund future fell by 0.03 percent to 129.93 points on Monday morning. The yield on ten-year federal bonds was 2.58 percent. Positive signals in the trade dispute between the USA and China are influencing demand for fixed-interest securities.
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The start of the week brought slight price losses for German federal bonds. The trend-setting Euro-Bund future fell by 0.03 percent to 129.93 points on Monday morning. At the same time, the yield on ten-year federal bonds was 2.58 percent. This development is primarily due to the positive signals in the trade dispute between the USA and China, which are dampening demand for fixed-interest securities.
The Asian stock markets also showed a significant upward movement on Monday, which further reduced the attractiveness of bonds. In Germany, the current price data provided hardly any noticeable stimulus. Producer prices fell 1.7 percent in September compared to the same month last year, marking the seventh consecutive decline. Analysts had expected a sharper decline, which surprised market participants.
The development of producer prices is an important indicator of consumer prices, which in turn influence the monetary policy of the European Central Bank (ECB). From March to August, the decline in producer prices had accelerated to 2.2 percent, indicating continued deflation at the manufacturer level. This trend could also influence consumer prices in the long term, which the ECB must take into account in its monetary policy stance.
Overall, the bond market in Germany remains strongly influenced by global economic developments and the decisions of the ECB. Market participants are eagerly watching further developments in the trade dispute between the USA and China as well as the central banks’ reactions to the current economic challenges. The coming weeks could be crucial for the further development of the bond markets.
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