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German bonds: Significant price losses – Fed statements weigh on them

Thursday, 01/06/2022 12:50 PM from

dpa-AFX

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Flag of the Federal Republic of Germany. pixabay.com

FRANKFURT (dpa-AFX) – The prices of German government bonds fell noticeably on Thursday. The trend-setting futures contract, the Euro Bund Future, fell by noon by 0.27 percent to 170.08 points. The yield on ten-year Bunds was minus 0.05 percent.

Market observers pointed to a rise in yields in the USA according to the latest statements by the US Federal Reserve, which would also have pulled the yields on Bunds up. In return, the courses came under pressure.

As can be seen from the minutes of the latest interest rate meeting of the US Federal Reserve, the economic and inflation developments speak for a faster exit from the ultra-loose monetary policy. In the minutes published the previous evening it is said that the Fed members rate the inflation trend as higher and more stubborn than previously assumed. In the market, this was taken as an indication of a more rapid rise in US interest rates.

“In addition to the discussion about more significant rate hikes, it was above all the demands of some members to start reducing the balance sheet relatively soon after the first rate hike that frightened the risk markets,” commented the Dekabank analysts. A reduction in central bank balance sheets should weigh on all assets. In addition to the bond markets, the stock markets also came under pressure on Thursday.

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