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by 3 minutes Read about the yields on government bonds in the Eurozone’s periphery. tmsnrt.rs/2ii2Bqr (Price action is updated, a chart is added, and supply is added.) (Reuters) – LONDON, July 14 (Reuters) – On Wednesday, Germany’s benchmark 10-year bond yield temporarily surpassed a one-week high, indicating that the recent rush into safe-haven debt may be waning. Long-dated US Treasury yields rose on Tuesday, putting upward pressure on euro zone bond yields in early trade, following lackluster demand for a $24 billion offer of 30-year bonds and a 3.39 billion euro ($4.00 billion) sale of 10-year German bonds. However, investors were on the sidelines ahead of US Federal Reserve Chairman Jerome Powell’s appearance before Congress later in the day. The benchmark 10-year bond yield in Germany surged to -0.273 percent, a one-week high, before falling to -0.30 percent, essentially unchanged for the day. The majority of other euro zone bond yields remained unchanged. Bund rates fell to three-month lows last week, around -0.34 percent, as markets evaluated the global economic and inflation prospects. Powell will talk a day after statistics showed the US consumer price index jumped 0.9 percent last month, the highest increase 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 rise in inflation caused by one-time causes. However, another month of strong U.S. inflation data raises doubts about whether the rise in prices is truly transitory. “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. The anticipation that the ECB 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.” (1 dollar = 0.8480 euros) Dhara Ranasinghe contributed reporting, while Catherine Evans and Emelia Sithole-Matarise edited the piece./nRead More

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