(Bloomberg) – It’s been a while, but European peripheral bonds, especially Italian, finally seem to have good news from governments, not just the European Central Bank.
The government bonds of the region’s most indebted countries could start well the week after EU finance ministers agreed on a package of 540 billion euros (590 billion euros). dollars) to combat the economic impact of the coronavirus. The agreement, after several days of negotiation, should help tighten premiums in the region.
“It is a good signal that they have agreed on a package,” said Luca Cazzulani, senior fixed income strategist at UniCredit SpA. “The market should react to the good news but the measures are broadly as expected.”
Yet the package does not respond to what Italian politicians have asked for – the issuance of so-called coronabonds, which would be issued jointly by governments in the region. The current measures must also be approved by the leaders as of next week, the divisions remaining.
Otherwise, the week should be generally calm after the Easter holidays, with only a few publications of economic data and a modest bond offer. And the ECB’s pandemic bond buying program is expected to limit yield increases.
Here’s what to expect next week:
Economic data: The week restricted due to the Easter break is dominated by final inflation readings for March, with data for the euro area expected on Friday; Over one year, 0.7%, before 1.2% No level 1 data is planned for the United Kingdom Central banks: the Bank of Italy publishes its quarterly bulletin Friday Tenreyro de BOE speaks Thursday at 2:30 p.m. BOE London, Haldane and Broadbent hold a briefing Friday at 3:00 p.m. Bond sales (total around EU17b, UK also sells around GBP10b): Tuesday: Netherlands to sell 0% bonds 07 / 2030 Wednesday: Germany to sell EU1b by 2.5% for 07/2044; The UK will sell GBP 3 billion of 0.875% 10/2029 and GBP 2 billion of 1.75% 09/2037 Thursday: France will sell bonds and inflation-indexed securities, Spain will sell 0% 04 / 2023, 0% 01/2025, 1.3% 10/2026, 1.85% 07/2035; UK to sell GBP 3 billion 1.5% 07/2026 and GBP 2 billion 1.75% 01/2049
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