January 26, 2018 / 11:16 AM / in a month

German bond yields jump after ECB's Coeure warns on inflation risks

LONDON, Jan 26 (Reuters) - Germany’s two-year bond yield rose to its highest level in almost seven months and five-year yields hit two-year highs on Friday after the ECB’s Benoit Coeure said he saw some complacency in financial markets towards inflation risks.

The 2-year Schatz yield rose to minus 0.548 percent , up around 2.5 basis points on the day, while five-year bond yields hit their highest level in over two years at minus 0.039 percent. “In general, the fact that Coeure sounded optimistic on growth and inflation on a global level may be pushing yields a little further up today after the European Central Bank meeting yesterday,” said Mizuho strategist Antoine Bouvet.

Borrowing costs across the euro zone rose on Thursday after the ECB surprised markets by striking a modestly dovish tone in the face of a robust euro. (Reporting by Dhara Ranasinghe, Editing by Abhinav Ramnarayan)

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