Eurozone bonds calmed on Wednesday, with yields falling for the first time in five sessions, as markets reassessed the European Central Bank’s perceived hawkish policy pivot last week and some doubts emerged about its communication strategy.
ECB Board Member Isabel Schnabel said on Wednesday interest rates may need to be raised if high energy prices risk pushing overall price growth expectations above the bank’s 2% target.
Italian and Greek bonds, the biggest beneficiaries of ECB stimulus, which had underperformed since the ECB meeting, also rallied.
The Greek benchmark 10-year bond yield eased from 2.466% at Tuesday’s closing to 2.444% late on Wednesday. [Reuters]