Borrowing costs in the euro area yesterday nudged further away from recent lows, as signs that European Central Bank (ECB) policymakers are a step closer to winding back hefty monetary stimulus weighed on sentiment.
Bank board member Benoit Coeure yesterday said that given the persistent challenges faced by the ECB in raising consumer prices, its definition of “medium-term,” the time horizon required to meet its inflation target, would be longer than usual.
Those comments briefly pushed bond yields down.
Although the ECB is expected to take baby steps toward exiting its stimulus scheme, news that policymakers have already discussed policy options has tempered sentiment in bond markets.
Reuters reported on Friday that ECB officials generally agreed their next move would be to cut bond purchases, and discussed four options, according to sources.
The news jolted markets a day after the ECB left policy unchanged and suggested that next month would be decision time regarding the future of the 2.3 trillion euro (US$2.76 trillion) bond-buying scheme.
The four options being considered, according to Friday’s report, include cutting monthly asset purchases from the current 60 billion euros to 20 or 40 billion from the start of next year, with the scheme running for another six or nine months.
Analysts said that this discussion of numbers in particular has unnerved the bond market.
“On Thursday there was a lot of relief that the ECB would stick to its expansionary stance, but latest comments suggest there is an ongoing discussion and that there are several council members in favor of a less expansionary stance,” DZ Bank strategist Daniel Lenz said. “We learnt the buying volume could be lower than previous market expectations.”
Germany’s 10-year bond yield was 1 basis points (BPS) higher at 0.33 percent, up just over 4 bps from two-and-a-half-month lows hit at the end of last week. It briefly touched the day’s low around 0.32 percent after Coeure’s comments.
Two-year German bond yields also pulled back from last week’s two-and-a-half-month lows to trade a tad higher at minus -0.78 percent.
For southern European bonds markets, especially vulnerable to signs of a scaling back of ECB stimulus, there was some support from a recovery in risk appetite on relief that the weekend passed with no North Korean missile tests.
Bond yields in Portugal, Spain and Italy were flat to a touch lower yesterday.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last