FRANKFURT (dpa-AFX) – The prices of German federal bonds rose on Monday after losses in the previous trading days. The trend-setting Euro Bund future rose by 0.20 percent to 124.72 points. The yield on the ten-year federal bond fell to 3.08 percent. On Friday, the yield reached 3.12 percent, its highest level since 2011.
The bonds thus stabilized after the recent significant price losses. ECB representatives dampened expectations of imminent key interest rate increases, which had arisen in the wake of the significant rise in oil prices. “The Financial markets “We have somewhat overinterpreted the situation in the last few days,” said the president of the French central bank in an interview with the Italian daily “La Stampa” published on Monday. “The debate about fixed dates seems to me to be very premature.”
In addition to Villeroy de Galhau, ECB Director Isabel Schnabel has recently been rather reserved about the possibility of a quick one Interest rate increase shown. The ECB should not rush its response to the Iran war. “We have time to examine the data and analyze what is actually happening,” Schnabel said at an event in Zurich on Friday.
However, uncertainty regarding the Iran war remains high. The USA and Israel are continuing their violent attacks in Iran in the fifth week of the war. Meanwhile, US President Donald Trump fueled speculation about a ground offensive in the Islamic Republic. “Maybe we’ll take Kharg Island, maybe we won’t. We have many options,” he told the Financial Times. Iran transacts around 90 percent of its oil exports through Kharg.
As trading continues, the markets will focus on inflation figures from Germany. In view of the oil price shock, experts expected a noticeable increase in the inflation rate. The data that has already been published from individual federal states suggests this. “Since the oil price continued to rise over the course of the month and gas and electricity prices usually only have a delayed effect, further increases to over 3 percent can be expected by the summer, provided that oil prices do not collapse massively again before then.”/jsl/jkr/stw
