Started by PocketOption, Feb 22, 2023, 04:21 am
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On Tuesday, eurozone government bond yields went up. This is because survey data showed the economy got stronger in February. This means more interest rate hikes are expected.
The yield on Germany’s 2-year bond, the most sensitive to interest rate assumptions, hit a 14-year high of 2.96%. It has increased by the last 3 basis points to 2.924%.
The advance purchasing managers’ index for the eurozone rose to a nine-month high of 52.34 in February. This was higher than January’s 50.34 and higher than the expected 50.64.
Europe’s service sector improved. But manufacturing slowed down.. A reading above 50 indicates expansion, and the services sector reading came in at 53, beating expectations.
On Tuesday, Germany’s 10-year interest rate, the single currency bloc’s benchmark, rose 2 bps to 2.484%.
Yields, which go down with price, reached 2.566% on Friday after European Central Bank officials said they want to keep rates high.
The earnings further boosted data from a survey by Germany’s ZEW Institute, which showed the country’s investors are increasingly optimistic about global financial markets.
Italy’s ten-year yield went up 5 points to 4.393%. But it’s still below a six-week high of 4.485%.
The Italian 2-year interest rate increased by 7 bps to 3.516%. Still, it remained below the more than 10-year high of 3.559% set on Friday.
On Monday, economists at Goldman Sachs said they now expect 3 more rate hikes this year, up from the previous two. The bank plans a 50bp hike in March, 25bp in May, and another 25bp in June, taking rates to 3.56%.
Walmart Inc on Tuesday sounded a cautious note in its 2023 economic outlook as the retail bellwether forecast full-year earnings and warned that cautious consumer spending could weigh on profit margins.
Shares of the world’s largest retailer fell 4.63% to $139.76 in premarket trade as the company continued to raise prices from suppliers of many of its products amid high inflation.
Rising US consumer prices, amid higher housing and food costs, fueled fears that the US Federal Reserve may further lift borrowing costs to curb domestic demand, triggering an economic slowdown in the year’s second half.
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