German bonds: Slight price losses – ECB decision hardly moves
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FRANKFURT (dpa-AFX) – German government bonds gave way on Thursday. The monetary policy decisions of the European Central Bank (ECB) did not trigger any sharp price fluctuations. The trend-setting futures contract, the Euro Bund Future, fell by early evening
In view of rising inflation rates, the ECB sent the first signal that its ultra-loose monetary policy was coming to an end. The ECB will only purchase additional securities as part of its Pepp Corona emergency purchase program until the end of March 2022. However, the central bank continues to invest billions in the purchase of government bonds and corporate papers, as the Governing Council decided. The general APP purchasing program will be temporarily increased. At the same time, the central bank significantly increased its inflation forecast for the next year.
“Monetary policy in Europe will remain on the accelerator for almost the entire next year,” commented Dekabank chief economist Ulrich Kater. “It is difficult to understand that the path of monetary policy normalization is not shortened, even if the two percent target is reached or even exceeded in the ECB’s inflation forecasts in the coming years.” Overall, however, the decisions of the ECB were expected on the financial markets and therefore only triggered temporary price fluctuations.
Economic data from the euro zone surprised negatively. The corporate sentiment raised by Markit clouded over significantly. “The economy of the euro zone is shaken once again by the corona pandemic,” said Markit chief economist Chris Williamson. In the service sector in particular, the rising corona infections would have dampened growth and resulted in a disappointing end of the year. Germany is particularly badly affected, although the cooling has affected the entire euro region./jsl/zb
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