Thursday, July 5, 2007

European Government Bonds Head for Weekly Decline on Outlook for ECB Rates

(Bloomberg) -- European government bonds are set to
drop this week, extending the worst quarterly slide in almost
eight years, after European Central Bank President Jean-Claude
Trichet signaled policy makers may need to lift interest rates
further by year-end.

Benchmark debt has fallen, sending 10-year bund yields to
near a five-year high, as investors add to bets the ECB will lift
borrowing costs half a point by year-end. Bonds fell yesterday
after Trichet said inflation in the region needs ``careful
monitoring.'' The ECB earlier kept its key rate at 4 percent.


Read more at Bloomberg Bonds News

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