The German returns of 10 years rose nearly 2 basic points at 2.73%, while the return -sensitive returns of 2 years were flat at 1.94%.
FED -President Jerome’s speech On Friday will be the key, since traders assess the chances of a September rate by the US Central Bank.
Money markets are currently seeing an 80% chance on a reduction of 25 BPS during the next FED session in September.
All changes in the expectations of the FED rate often influence other bond markets in view of the scale of the American economy, the world’s largest.
Questions about the independence of the FED have surfaced again after Trump was called on the fed Governor Lisa Cook on Wednesday to resign on the basis of accusations that are by one of his political allies about mortgages they possess. In the meantime, traders are waiting for Euro Flash PMIs for August, of which RBC economists say it will be an important test for the impact rates that have on the economy. “We think that the PMIs will weaken in August, but not enough to seriously question the view that rates will not interrupt the growth recovery of the euro area,” they wrote in a note. But early data from France showed that business activities there exceeded expectations, closer to growth and at its highest in a year.
Another important test will be the release of a eurozone consumer confidence research for Augustus that will follow later on Thursday.
In the UK, loan data showed that the British public loans in the financial year so far have been matched the predictions that underlie the government’s tax and spending plans. This offered a little breathing space to finance Minister Rachel Reeves before greater challenges later this year.
The 10-year yield from Italy was almost 3 bps higher at 3.58%.
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