The European Central Bank (ECB) is driven by the recent rise in bond yields on government bonds in the euro countries. The ECB is looking at many indicators to assess whether there are still favorable financing conditions in the currency area, said Central Bank President Christine Lagarde on Monday at a virtual event of the EU Parliament.
The returns on government bonds are particularly important.
“Accordingly, the ECB is closely monitoring longer-term nominal bond yields,” said Lagarde. Because banks used this as a reference point when setting the prices for loans to households and companies.
The central bank will continue to support all sectors of the economy by ensuring favorable financing conditions during the pandemic, Lagarde said. She has been doing that since the beginning of the crisis.
Government bond yields had recently increased. The yield on the ten-year German government bond, which is the benchmark for government bonds in the euro countries on the stock exchange, was most recently minus 0.33 percent. At the beginning of the year it was minus 0.60 percent.
The upward movement is due, among other things, to increased inflation prospects in the euro zone and in the USA. (apa, reuters)
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ECB closely monitors government bond yields government bonds