* Chairman-designate's remarks suggest Fed in no hurry to
* French GDP data disappoints, German growth slows
* Data reinforces case for accommodative ECB stance
By Ana Nicolaci da Costa
LONDON, Nov 14 Euro zone bonds rose on Thursday
after comments by Federal Reserve governor-designate Janet
Yellen suggested she was in no hurry to scale back monetary
Yellen, in remarks released ahead of her Senate confirmation
hearing, said the U.S. central bank has "more work to do" to
help an economy and labour market that are still
A stronger-than-expected U.S. payrolls number last week
prompted market participants to bring forward the expected
timing of Fed tapering of its asset purchase programme.
A sensitive topic for markets, the global monetary policy
landscape has been hard to gauge despite central banks' efforts
to give forward guidance.
"We have the headlines from Yellen, from the U.S., we have
an ECB which is talking about possibly further stimulus ... so
all of this is supportive," Rainer Guntermann, strategist at
Commerzbank said. "The technical call would be for longs
(buyers) in the Bund future."
German bond futures were up 16 ticks on the day at
141.49, having rallied in the previous session after dovish
comments from ECB Executive Board member Peter Praet.
Euro zone bonds rose across the credit spectrum, with
ten-year Spanish yields down 1.6 basis points at
4.09 percent and Italian yields 2.4 bps lower at
Praet told the Wall Street Journal the ECB could adopt
negative interest rates or buy assets from banks if needed to
lift inflation closer to its target.
The ECB surprised markets last week with a interest rate cut
and reiterated its accommodative monetary policy stance.
Data on Thursday reinforced the idea that the euro zone
economy needs further support, showing France's recovery fizzled
out in the third quarter and German growth slowed.
The euro zone as a whole emerged from recession in the
second quarter and figures due at 1000 GMT are forecast to show
further tepid growth, of 0.2 percent.
"The euro area recovery is very fragile and that will
reinforce markets expectations that the ECB will maintain its
accommodative stance for some time," Nick Stamenkovic, bond
strategist at RIA Capital Markets.
"But I think for them to ease further and to put the deposit
rate into negative territory, you either need to see a complete
reversal of the positive (trend) you have seen in the PMIs
and/or a building of deflation pressures in the euro zone as a
Surveys last week showed the pace of the recovery in euro
zone private sector business eased slightly last month, but by
less than originally estimated, while the data still showed an
expansion in activity.