ECB rate decision affects bond yields
Posted on April 6th, 2006 by Brian Turner
In the Eurozone on Thursday, yields on government bonds were down and prices rose after the president of the European Central Bank made comments to the effect that the Bank has no intention of raising interest rates in May, contrary to the expectations of many analysts. The remarks came after the Bank voted to leave interest rates at their current level of 2.5 percent.
Yields had risen almost 5 basis points to 2.887 percent on ten-year bonds before the rate decision was announced. After the decision and remarks, the yield on the ten-year Bund dropped significantly, although by afternoon it was still up 1.7 basis points to 3.855 percent. Yields on the two-year Schatz were down by 2.3 basis points to 3.274 percent.
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