Home Business BTP rallies on EU recession risk, 10y yield down more than 30bps from yesterday’s highs

BTP rallies on EU recession risk, 10y yield down more than 30bps from yesterday’s highs

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BTP rallies on EU recession risk, 10y yield down more than 30bps from yesterday’s highs

The signs of recession in Europe are holding the ground today on the markets with strong purchases on government bonds. The German 10-year yield fell to 1.026%, on its lows since the end of May and a long way from the highs of 1.76% reached on 21 June. You also buy on BTPs despite the situation of political uncertainty. The 10-year yield travels in the 3.3% area, down by more than 30 basis points compared to the peaks reached yesterday in the wake of Draghi’s resignation and the ECB’s announcement on rates and TPI.

The Eurozone Composite PMI index fell to 49.4 points in July from 52 the previous month. These are the lows at 17 months. The euro zone economy has therefore entered shrinking territory, with production and new orders both falling for the first time since the COVID-19 lockdown in early 2021.

“The sharp decline in the composite PMI from 52 to 49.4 indicates that recessionary pressures are spreading across the eurozone economy – says Bert Colijn, Senior Economist at Ing -. For the European Central Bank, this confirms our view that this year it will only increase by another 50 basis points in total ”.

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