FRANKFURT (dpa-AFX) – The prices of German government bonds fell sharply on Monday. The Euro-Bund-Future futures contract, which is trend-setting for the bond market, fell by 0.66 percent to 160.38 points by late afternoon. The prices have thus significantly expanded the losses from early trading. The yield on ten-year federal bonds rose to 0.44 percent. This is the highest level since the end of 2018.
Yields on the German bond market are being boosted by rising inflation expectations. This is primarily due to high energy and raw material prices. The trend was confirmed in the morning by new price data from Germany. According to data from the Federal Statistical Office, producer prices rose by 25.9 percent year-on-year in February, more than ever before.
According to estimates by the European Central Bank (ECB), the euro zone economy should continue to grow despite the war in Ukraine. The war will have consequences for growth in the currency area, said ECB President Christine Lagarde in Paris. Even in the “worst scenario”, however, the ECB assumes that the economy will grow, Lagarde put it into perspective. Lagarde described such a scenario with inflationary second-round effects in the form of significantly rising wages, a boycott of Russian energy and a long-lasting and intensified war./jkr/jha/