The 10-year bond return of Germany, the benchmark for the eurozone, was the last at 2.64%, little changed to the day and week, while 2-year-old yields pushed up to 2%, an increase of 8 basic points of the week.
Much of the advance of the German 2-year return came on Thursday after the European Central Bank had left the interest rates on Thursday as expected and did not offer any indications about the next step.
The proceeds from the European government bonds remained stable this week and weakened to deviate from American treasury as a result of various central banking prospects. The ECB kept the rates stable, which led to expectations of a decline in December. Market focus shifts to Fitch’s evaluation of the sovereign debts of France, which may influence the spread between French and German bond returns.
JPMorgan now expects the ECB to reduce the interest rates again this year in December, from an earlier prediction of a reduction in October.
Other regional bond returns, such as those of France and Italy, largely acted in line with those of Germany.
In the meantime, the money markets are completely praising in a 25-based point that will be accelerated by the American Federal Reserve next week. The 10-year-old US Treasury yield was at 4.03% after slipping to the lowest level since April on Thursday, on course to end the week with 5 basic points. Elsewhere, the focus is also on the assessment of the sovereign debt rating of France expected by Fitch after European market hours. A downgrade would push the assessment from France to A+, seven notches over the junk area and the lowest among the peers.
The distribution between French and German 10-year-old bond returns was the last at 77 basic points, compared to the six months of 83.38 BPS this week.
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