PARIS, July 22 (Reuters) – Bond yields in Europe fell sharply on Friday and that of the ten-year German Bund, the benchmark for the euro zone, briefly fell below 1% for the first time since May 30.
Around 2:10 p.m. GMT, the ten-year German bond rate was 1.017% (-20.8 points) and its French equivalent of the same maturity fell by 20.6 points to 1.601%.
Driven by accelerating inflation, which pushed consumers to cut back on spending, eurozone private activity contracted unexpectedly in July with the composite PMI falling to 49 .4 in first estimate after 52.0 in June and a Reuters consensus at 51.0.
The Bundesbank also warned on Friday that Germany’s economy could grow in the third quarter at a somewhat weaker pace than forecast last month and could face another spike in inflation in September due to the end of subsidies. public.
According to Refinitiv data, traders now expect the European Central Bank to hike just 39 basis points in September from a 50 basis point rise on Thursday, and a 103 basis point hike by the end of the month. year against an increase of 120 points the day before. (Written by Claude Chendjou, edited by Kate Entringer)