German bonds: Slight price losses – ECB decision hardly moves

Thursday, 12/16/2021 6:43 PM from


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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 by 0.03 percent to 174.03 points. The yield on ten-year Bunds rose to minus 0.36 percent.

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.


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