By 3 Min Read* Government bond yields in the Eurozone’s periphery tmsnrt.rs/2ii2Bqr (Reuters) – LONDON, July 14 (Reuters) – On Wednesday, government borrowing prices in the euro area rose a smidgeon as the market was pulled down by weakness in US Treasuries and anticipated supply from Germany. Long-term Treasury yields increased on Tuesday, owing to strong demand for a $24 billion offering of 30-year notes, which came after data showed June inflation surged faster than expected. With Germany poised to issue 4 billion euros in 10-year bonds later this session, bond rates have been pushed higher. However, trade was mainly restrained ahead of US Federal Reserve Chairman Jerome Powell’s appearance to Congress later this session. He’ll speak a day after statistics showed the consumer price index in the United States rose 0.9 percent in June, the most since June 2008, after rising 0.6 percent in May. So far, the Federal Reserve and the European Central Bank have stated that they will ignore any near-term increase in inflation that is likely to be driven by one-time events. “It’ll be intriguing to see how he (Powell) reacts to the current CPI number, especially given markets have already accelerated the pace of potential Fed hikes,” said Deutsche Bank strategist Jim Reid. Most 10-year bond rates in the euro region were 1-2 basis points higher on the day in early trade. At -0.29 percent, Germany’s Bund yield was up one basis point. It rose to a one-week high of -0.28 percent after plunging to more than three-month lows of roughly -0.34 percent last week as markets evaluated the global growth and inflation prospects. The anticipation that the European Central Bank will maintain its dovish approach at its policy meeting next week, the first following a strategy review, continued to bolster euro zone bond markets, according to analysts. Bond yields are projected to grow further out, according to Florian Spate, senior bond strategist at Generali Investments. “We don’t believe the recent yield drop will endure,” he said. “We believe there is room for greater yields in the United States and Europe going forward.” (Dhara Ranasinghe contributed reporting, and Catherine Evans edited the piece.)/n
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