Euro Bonda Fall On Ukraine Optimism

European government bonds fell as talks between Russian President Vladimir Putin and a senior European official aimed at easing the crisis in Ukraine helped damp demand for safer assets.

Benchmark German 10-year bunds declined for a third day after Putin told the chairman of the Organization for Security and Cooperation in Europe Didier Burkhalter at a meeting in Moscow that all parties are interested in resolving the conflict. Austrian, Dutch and Spanish securities also dropped. Most euro-area sovereign bonds rose earlier amid speculation European Central Bank policy makers meeting tomorrow will discuss new measures to stimulate the region’s economy.

“Putin will have talks with the Organization for Security and Cooperation in Europe, so that’s why I think equities are slightly higher this afternoon and the bund is slightly lower,” said Mathias Van Der Jeugt, a research analyst at KBC Bank NV in Brussels. “Tomorrow, I don’t think we should expect further action. We believe the ECB will stay on hold.”

Germany’s 10-year yield rose two basis points, or 0.02 percentage point, to 1.48 percent at 3:09 p.m. London time after earlier declining as much two basis points. The 1.75 percent bund maturing in February 2024 fell 0.225, or 2.25 euros per 1,000-euro ($1,393) face amount, to 102.395.

The rate on Austrian 10-year debt climbed three basis points to 1.71 percent and that on similar-maturity Dutch bonds increased three basis points to 1.81 percent.

Bloomberg

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell