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IPFS News Link • Germany

German bond yields rise, still exposed to U.S. Treasury selloff

•, Stefano Rebaudo

The ECB confirmed plans on Thursday to end its stimulus scheme in the third quarter, avoiding any firm pledge beyond the end of bond buying but also stressing that policy is flexible and can quickly change.

U.S. Treasury yields were flat, after reaching three-year highs on Monday as investors adjusted for the Federal Reserve aggressively raising rates.

Some analysts argued that U.S. Treasuries have been in the driving seat of the fixed-income market as the ECB's policy of "maximum optionality" has left a vacuum that has been filled by expectations about the Fed's monetary stance.

However, they also said the recent Bund selloff might be an overshoot, as the Fed is expected to tighten its monetary policy much faster than the ECB.

"Hawkish pricing, even if excessive, is here to stay until inflation cools down," ING analysts said.

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