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Euro zone bond yields tick up, eyes on French auction
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Euro zone bond yields tick up, eyes on French auction
Jun 20, 2024 12:58 AM

LONDON, June 20 (Reuters) - Euro zone government bond

yields rose on Thursday with focus on a French bond auction that

will test demand ahead of a snap election on June 30 and as

investors awaited a string of central bank meetings on the edge

of the bloc, including in Britain.

Germany's 10-year bond yield, the benchmark for

the euro zone, rose 1.8 basis points to 2.42%.

Italy's 10-year yield was higher by 3.7 basis

points​ at 3.98%, and the gap between Italian and German Bunds

widened 1.4 basis points to 155 bps. It hit 159.3

bps last week, its highest since February.

The gap between France and Germany's 10-year yields

stood at 73 basis points (bps), steady on the day,

but below the seven-year high of 80 bps hit last week.

The spread has widened from under 50 bps since French

President Emmanuel Macron called a snap parliamentary election

to be held on June 30 and July 7 in response to a strong showing

for far-right parties in the European Parliament election.

"OATs (French government bonds) will face their next major

test today with medium term and linker auctions scheduled," said

Commerzbank analysts in a note.

They said France's debt office, the AFT, had announced a

"relatively modest volume" range of 8 to 10.5 billion euros in

contrast to the medium-term auction volume which had been closer

to 12 billion euros in recent months.

Investors are also watching central bank meetings, with the

Bank of England announcing its latest rate decision at 1100 GMT.

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