Lagarde attempts to keep the peace in the European bond market
German 10-year bund yields are up a measly 2 bps to -0.27% so far today
Market expectations aside, the ECB is perhaps to thank for European bonds keeping relatively more stable as compared to Treasuries in recent weeks.
And ECB president Lagarde is making sure today that things do not get out of control amid the surge higher in Treasury yields. 10-year yields in the US are up by over 7 bps to around 1.72% but the moves in Europe are certainly less dramatic.
Sure, 10-year German bund yields are at their highest in nearly three weeks but watch for the 'invisible hand' trying to keep the peace/calm as it did last month.
The potential third virus wave in Europe and the many disturbances to the vaccine rollout are two issues tempering with the economic outlook and may help to keep yields lower, but the ECB is arguably the key factor still in dictating market sentiment.
For now, Lagarde is trying to make sure that the market gets the message but unless the PEPP data backs her up, there is only so much patience that investors can tolerate in the meantime - especially if Treasury yields are surging higher. Tick tock, tick tock.