Nervousness gripped the sovereign debt market.
Interest rates on government bonds jumped in Europe, after Christine Lagarde's unexpected change of tone last Thursday, hinting at a possible change in the accommodating monetary policy of the European Central Bank (ECB).
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The ECB accused of impotence in the face of the inflationary surge
The persistence of high inflation (5.1% in January), which will undoubtedly remain so, could lead the ECB to reduce its policy of asset purchases and to raise its rates sooner than expected, perhaps from this year.
In their haste, the markets are now even anticipating a first increase in the deposit rate (currently at -0.5% since September 2019) as of June.
As a result, investors adjust their valuations of the long rates at which governments borrow on the markets.
A violent upward correction for bond yields, reflecting a drop in demand.
End of negative rates
The market reference rate, that of the ten-year German Bund, is…
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