PrintEuro zone yields drop, markets cut bets on ECB hikes after Iran says Hormuz open
BY Reuters | ECONOMIC | 09:15 AM EDTBy Stefano Rebaudo
April 17 (Reuters) - Two-year German government bond yields dropped sharply on Friday to one-month lows after Iran's foreign minister said on Friday that passage for all commercial vessels through the Strait of Hormuz is declared completely open for the remaining period of ceasefire.
Two-year Schatz yields, the most sensitive to shifts in expectations for rates and inflation, fell as much as 11.2 basis points to 2.412%, before pulling back to 2.43%, showing a 9.6-bp drop on the day. Two-year yields hit their highest since last July in late March, at around 2.77%.
Money markets scaled back bets on European Central Bank rate hikes and priced in an 8% chance of a rate hike at this month's meeting, from 15% earlier in the session. They also indicated ECB deposit facility rate at 2.44% by year-end , from 2.55% earlier in the session.
(Reporting by Stefano Rebaudo; Editing by Amanda Cooper)
