Bonds and commodities – rising bond yields – economy

HomeEconomy11. October 2021, 6:47 p.m.

Bonds and commodities: bond yields rise

Investors expect the ECB to raise interest rates by the end of 2022 and sell government bonds. Ten-year federal yields hit their highest level since May.

The euro started the new stable trading week on Monday. In the evening, the European common currency cost $ 1.1563, about as much as Friday evening. So last week’s 15-month low of $ 1.1529 was not far off.

In the commodities market, the price of US WTI oil temporarily rose 3.6% to $ 82.18 per barrel (159 liters), the highest level since November 2014. During the economic recovery, prices coal and gas have also increased significantly. make oil more attractive as a fuel to generate electricity and drive up crude oil markets. According to brokers, the rally is not in sight. “The price of oil is expected to continue to rise in the short term,” said Carsten Fritsch, analyst at Commerzbank.

The prospect of tightening monetary policy in the face of rising inflation has put further pressure on bond markets. Eurozone investors threw bonds out of their portfolios; in return, the yields have increased significantly. The ten-year government bond yield climbed to minus 0.108% earlier in the week, the highest level since May. A ten basis point European Central Bank interest rate hike by the end of 2022 is now fully integrated into money markets. The expectation that the Bank of England (BoE) would raise interest rates long before the ECB also caused turmoil in bond markets. BoE Managing Director Michael Saunders said a newspaper article published over the weekend said households should prepare for a rate hike “much sooner” in the face of inflationary pressures. The UK ten-year bond yield reached 1.205%, marking the highest value since May 2019. US government bond yields also rose significantly.

© SZ of October 12, 2021 / amon, Reuters, dpa

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