Coronavirus treatment optimism ends Bund rally


By Yoruk Bahceli

AMSTERDAM, Aug 24 (Reuters) - Safe-haven German bond yields ticked up after their longest decline this year as risk appetite on Monday as hopes for a coronavirus treatment boosted risk assets.

Global shares rose on Monday after the U.S. Food and Drug Administration authorised the use of blood plasma from recovered patients as a coronavirus treatment option.

Safe-haven German 10-year yields were up around 1 basis point to -0.50% in early trade DE10YT=RR after falling for six consecutive sessions last week, the longest decline since January.

Italy's 10-year bond yield fell 2 basis points to 0.99% IT10YT=RR.

Without data releases to move the market on Monday, attention was turning to a speech by Federal Reserve Chair Jerome Powell on Thursday, where he will discuss the bank’s monetary policy framework review.

Later on Monday, investors will watch the European Central Bank's weekly publication of the breakdown of its conventional bond-buying programmes, which have remained subdued in recent weeks during summer trading.

"The Bund is back towards a more bullish path, and this is likely to remain the bias at the start of this week. The market is eyeing up what's to come in September, and in EGBs (European government bonds) this will mean supply, but also the ECB becoming more active with their QE (quantitative easing) programs," analysts at Mizuho told clients.

"This pick-up is more likely in the first week of September than the one coming, but the market will be pre-empting this buying."

The 10-year Bund yield fell below -0.50% last week after holding above that level for nine days, as investors grew risk averse.

In the primary market, Belgium is scheduled to re-open a 10-year bond via auction.

(Reporting by Yoruk Bahceli, editing by Larry King)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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