Bund yields hit highest level in over 15 years before ECB meeting
TLT•German and Italian yields move higher
German 2-year bond yields DE2YT=RR, more sensitive to policy rates, fell 2 bps to 3.03% after reaching 3.0658% early in the session, the highest since June 2024.
Italy's 10-year government bond yields IT10YT=RR rose one bp to 4.29%, after hitting 4.2990%, the highest since November 2023. The yield gap versus safe-haven Bunds was at 81.50 bps.
Comments suggest markets are watching for any dovish signal
"It will be intriguing how (ECB President Christine) Lagarde will address the developments in bond markets," Erik Liem, strategist at Commerzbank, said.
"While it may be too early for the ECB's October 2023 playbook, even minor hints in this direction could have a significant impact today," he added.
Following a series of rate increases after Russia's 2022 invasion of Ukraine sent European energy prices soaring, the ECB kept rates unchanged after a September 2023 hike and resisted calls for further tightening.
