European government bond yields moved broadly down Thursday, led by Spain. The Spanish 10-year lost 3.3 basis points Thursday after a successful bond auction and comments from Economy Minister Luis de Guindos, who tried to re-assure markets that Catalonia’s independence “won’t happen”.
The German 10-year is underperforming as intra-Eurozone safe haven flows are being reversed, but also down 0.8 bp. The Gilt yield is down 2.0 bp at 1.36%, despite the fact that the FTSE 100 is outperforming as sterling is once again under pressure. There were no key data releases Thursday.
Eurozone retail purchasing managers index (PMI) moved higher, but didn’t have much impact, while an uptick in Swiss headline inflation still left the annual rate at just 0.7%.
Swiss National Bank President Thomas Jordan was little impressed and stressed again that negative interest rates and ad hoc forex intervention remain necessary tools.
The Eurozone is awaiting the minutes of the last policy meeting, as European Central Bank Governing Council member Ewald Nowotny calls for a slow reduction in asset purchases from next year.