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(CEP News) - European bonds are lower on Tuesday after commentary from a European central banker suggested that the ECB could continue stimulating the economy beyond May's rate decision.
As deflation risks continue to mount in the euro zone, the European Central Bank will continue to discuss monetary policy measures including cutting money market rates further, longer term loans from the ECB and the possibility of asset purchases, according to Cypriot Central Banker Athanasios Orhpanides speaking in an interview with Bloomberg. According to the article the comments imply that the central bank could continue to stimulate monetary policy beyond the meeting on May 7. Up to now, ECB President Jean-Claude Trichet has indicated that rates will be cut at a "measured" pace, and that the deposit rate would not be allowed to go lower. The UK Chancellor of the Exchequer Alistair Darling is expected to predict a halt in GDP declines in the UK as of Q4 2009, according to an article in local newspaper The Daily Telegraph. Darling will be presenting the country's new budget on April 22, and faces one of the worst budget deficits in the history of the island nation. On the equity market front, European stocks are higher, with the Eurostoxx up 36 points to 1954, the UK FTSE 100 up 54 points to 4038 and the German DAX up 80 points to 4571. In Germany, returns on two-year German bonds are down 4.2 bps to 1.35%, with five-year yields down 6.1 bps to 2.37%, 10-year yields down 4.5 bps to 3.21% and 30-year yields down 0.9 bps to 4.04%. The Euribor September 09 contract is up 5.0 ticks to 98.71. Yields on UK two-year bonds are down 6.5 bps to 1.30%, with five-year yields down 7.8 bps to 2.38%, 10-year yields down 7.9 bps to 3.21% and 30-year yields down 6.3 bps to 4.25%. The Short Sterling September 09 contract is up 3.0 ticks to 98.65. By Erik Kevin Franco,
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; edited by Nick Say,
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