Euro zone yields set to end the week roughly unchanged after ECB

Euro area sovereign bonds were on track to end the week roughly unchanged, with the benchmark 10-year Bund yield well below its peak above 3%, after the European Central Bank reiterated policy rates would stay at the current levels for an extended period. The ECB left rates unchanged as expected on Thursday and insisted that rising market talk of rate cuts was premature. Some analysts spotted some dovish tilts in remarks from ECB President Christine Lagarde, such as “inflation dropped markedly in September” while yields “had risen markedly since our last meeting”, or the fact that she refrained from shifting the focus to the reduction of its balance sheet.