Bond yields higher again

The pound has fallen against both the euro and the dollar to trade at 87p and $1.39 respectively this morning, down from this week’s highs of under 86p and $1.42, while the single currency has also lost some ground to the dollar to trade just over the $1.21 mark

Bond yields rose further yesterday with 10-year yields in the US increasing by about 15bps to 1.52%, their highest level since last March, while equivalent German yields  finished up around 8bps at -0.23%. Meanwhile, equity markets ended lower, led by a decline in US stocks of around 2%

ECB Chief Economist, Philip Lane, says the central bank is “closing monitoring the evolution of longer-term bond yields”, as these are used as a “reference in pricing of loans to households and firms”

Economic sentiment in the Euro Area nudged up in February to its highest level since last August according to the European Commission’s Economic Sentiment Indicator, though it still remains below where it stood immediately pre-pandemic

Data due today includes consumer confidence, consumer spending and PCE inflation in the US