LONDON, April 19 Reuters Euro zone government bond yields were broadly steady on Monday, with markets largely on hold ahead of this weeks European Central Bank meeting.
New supply, estimated at over 30 billion euros 36 billion this week and above the average for the year so far according to Commerzbank, could put some upward pressure on yields.
However, significant moves were likely to be limited before Thursdays ECB meeting and most 10year bond yields across the euro area were steady to a touch lower on the day.
The ECB has stepped up the pace of bond buying in its Pandemic Emergency Purchase Programme since the March meeting to contain a rise in borrowing costs that could derail the recovery.
Latest weekly bond buying data are released later on Monday.
Bond markets are watching what the ECB says and does closely amid signs of disagreement among policymakers over the future pace of bond purchases especially once a recovery takes hold.
ECB chief Christine Lagarde should try and steer clear of the debate on the future of PEPP, to avoid showcasing divisions on the governing council, said Antoine Bouvet, senior rates strategist at ING. Too many displays of optimism are equally unadvisable, but the outlook has improved in the euro zone, if tentatively.
Stefan Legge, an economist at the University of St Gallen in Switzerland, said that he would be paying attention to what the ECB says about anchoring longterm inflation expectations.
Right now, the ECB is…