European bonds may advance, with two-year German notes poised to post their biggest monthly gain in six years, on expectations for lower interest rates to prevent the prospect of war causing a global recession.
"The short end has some potential," to gain further, said Anders Schelde, who helps manage 100 billion euros (US$92 billion) at Nordea Investment Management in Copenhagen. The European Central Bank "will ignore the risks to inflation" and cut its key interest rate again to bolster growth, he said.
The yield on the 3 3/4 percent German note due 2003 fell 3 basis points to 3.45 percent Friday, its lowest level since Sept. 6, 1999. Yields have fallen half a point so far this month. The 5 percent 10-year German bond yield advanced 3 basis points to 4.87 percent, while December bund futures fell 0.23 points to 108.
Investors expect central banks to follow last week's rate cuts with further reductions to bolster consumer confidence, after hijacked planes destroyed the World Trade center. US President George W. Bush told the US to "be ready" to fight Osama bin Laden, the main suspect for last week's attacks.
HSBC Bank Plc, Europe's biggest bank by market value, lowered its forecast for the benchmark rate for the 12 countries sharing the euro to 3 percent. That's after the ECB dropped its key rate 50 basis points by 3.75 percent on Monday, tracing a similar move by the US Federal Reserve.
The rate on the three-month euro futures contract expiring Oct. 15 fell 10 basis points to 3.55 percent and the rate on the December contract declined 8 basis points to 3.38 percent. The European three-month lending rate is 3.69 percent. Expectations the ECB will soon cut rates again were boosted after the bank said in its monthly report Thursday that terrorist attacks are "likely to weigh on confidence in the euro area and on the short-term outlook for economic growth."
Policy-makers announce their next interest-rate decision on Thursday. The Ifo research institute's index of executive confidence showed German executives were more pessimistic in August than in the previous month, the sixth decline in seven months. The index fell to 89.5 from 89.8 in July. Confidence is likely to erode further after the terrorist attacks in the US, analysts said.
"Some people think that we may slide into a recession also in Europe," said Ronny Beck, who helps manage about US$9.5 billion of fixed-income assets at Julius Baer Investments Ltd.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique