U.S. markets closed
  • S&P 500

    4,128.80
    +31.63 (+0.77%)
     
  • Dow 30

    33,800.60
    +297.03 (+0.89%)
     
  • Nasdaq

    13,900.19
    +70.88 (+0.51%)
     
  • Russell 2000

    2,243.47
    +0.88 (+0.04%)
     
  • Crude Oil

    59.34
    -0.26 (-0.44%)
     
  • Gold

    1,744.10
    -14.10 (-0.80%)
     
  • Silver

    25.33
    -0.26 (-1.02%)
     
  • EUR/USD

    1.1905
    -0.0016 (-0.13%)
     
  • 10-Yr Bond

    1.6660
    +0.0340 (+2.08%)
     
  • GBP/USD

    1.3707
    -0.0028 (-0.20%)
     
  • USD/JPY

    109.6300
    +0.3660 (+0.33%)
     
  • BTC-USD

    59,935.50
    -647.24 (-1.07%)
     
  • CMC Crypto 200

    1,235.89
    +8.34 (+0.68%)
     
  • FTSE 100

    6,915.75
    -26.47 (-0.38%)
     
  • Nikkei 225

    29,768.06
    +59.08 (+0.20%)
     

CORRECTED-Euro zone bond yields dip before fourth-quarter economic data release

Abhinav Ramnarayan
·2 min read

(Changes to fourth quarter of 2020 (from first quarter 2021 previous) in headline and lede)

* Final euro zone Q4 GDP data due later on Tuesday

* German 10-year yields dip 2 bps ahead of data

* EU to issue 15-year bonds under SURE programme

* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr

By Abhinav Ramnarayan

LONDON, March 9 (Reuters) - Euro zone government bond yields dipped across the board on Tuesday before the release of data that is expected to show the euro zone economy contracted in the fourth quarter of the year.

Final numbers on the euro zone economic output are due out at 1000 GMT and market expectations, according to a Reuters poll, are the euro zone's economy shrank 0.6% over the previous quarter and 5% over the same period in 2019.

Euro zone government bond yields, which have hit some of their highest levels in nearly a year recently, dipped across the board, a sign of caution before the release.

Germany's 10-year government bond yield dropped two basis points to -0.298%, moving further away from the one-year high of -0.203% in late February.

Other euro zone bond yields were also down 1 to 3 basis points across the board.,

Analysts don't expect the economic gloom and the fall in yields to last as vaccination programmes progress in Europe and the United States, fuelling an economic recovery from the COVID-19 crisis.

Strong economic performance tends to dampen demand for "safe" government bonds.

"We read price action yesterday, especially the strong rally and rotation in stocks, as a sign of growing confidence in the post-Covid recovery," analysts at ING said in a note. "In the absence of strong intervention from either the Fed or the ECB, this should bring about higher rates."

The European Central Bank failed to increase the pace of its emergency purchases last week, missing market expectations and adding to doubts about its commitment to supporting a pandemic-stricken, debt-laden economy.

Later today, the European Union is due to continue its emergency SURE borrowing programming by issuing 15-year Social bonds. Analyst expectations are for a deal size of below 10 billion euros. (Reporting by Abhinav Ramnarayan, editing by Larry King)