German bonds: Yields are falling – the risk of war is unsettling

FRANKFURT (dpa-AFX) – The yields on German government bonds fell slightly on Monday due to the Ukraine conflict. The 10-year yield fell 0.02 points to 0.27 percent. The return is thus slightly below the three-year high recorded last week.

The trend-setting futures contract Euro-Bund-Future was at 165.21 points. It was still well below 165 points late Friday afternoon and then rose in late trading. However, the future was recently well below its daily highs.

The continuing tense situation on the Ukrainian-Russian border is causing restraint on the financial markets. The growing threat of war supports safe paper and weighs on the stock markets. Recent diplomatic efforts have yielded no visible results. Many countries have called on their citizens to leave Ukraine. Chancellor Olaf Scholz again threatened Russia with tough sanctions in the crisis with Ukraine, but at the same time underpinned the offer for dialogue.

Economic data are hardly on the agenda at the start of the week. However, some high-ranking central bankers, including ECB President Christine Lagarde, are speaking out. Recently, some central bankers had tried to dampen the high interest rate expectations of the European Central Bank. In view of the high level of inflation, up to two interest rate hikes are considered possible on the money markets by the end of the year. Bank analysts are usually more cautious: “We expect only one rate hike by the ECB in December,” says Dekabank./jsl/men

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