Trichet, Poised to Raise Interest Rates, Follows in Bundesbank Footsteps

(Bloomberg) -- The European Central Bank might be
run by a Frenchman; its heart and soul belong to Germany's
Bundesbank.

ECB President Jean-Claude Trichet faces political pressure
to stop raising interest rates, and some of his own policy
makers query the extent of the inflation threat in Europe.
Still, investors are betting he'll push borrowing costs higher,
upholding the legacy of Germany's central bank, which celebrates
its 50th anniversary tomorrow.


Read more at Bloomberg Bonds News

Futures drop on inflation, rate worry

(Reuters) - The European Central Bank raised interest rates by 25 basis points to 4 percent as expected on Wednesday, which could put pressure on global bond yields to rise. U.S. stock index futures held steady well below fair value. Interest-rate jitters sent stocks lower on Tuesday as higher bond yields pose competition for stocks.




"The higher rate environment is not just domestic. I think the market will take this and start to focus on inflation as it gets concerned about how high rates will have to rise," said Peter Dunay, investment strategist at Leeb Capital Management New York.


Read more at Reuters.com Business News

TREASURIES-Bonds pressured by Bunds in absence of data

(Reuters) - Bund yields climbed to multi-year highs after data
reinforced the outlook for strength in the euro zone economy,
which could lead to more interest rate hikes by the European
Central Bank, analysts said.




"We have been taking our cue from European markets, which
have been leading U.S. markets today. The European Central Bank
is still in play and short-term rates are heading higher. I
think that probably will be the main technical factor for
Treasuries," said George Goncalves, chief Treasury/TIPS/agency
strategist with Morgan Stanley in New York.


Read more at Reuters.com Bonds News

Rand softer, seen stuck in ranges

South Africa's rand was slightly weaker against the dollar on Friday, giving up overnight gains prompted by a firmer euro after news that the European Union may hike interest rates in March.

The rand was trading at 7.15 versus the dollar at 0643 GMT, from its New York close of 7.1385 on Thursday.

With little impetus seen to inspire movements either way, traders said the rand would likely trade in narrow ranges in the session.

Read more at Reuters South Africa

ECB holds firm on rates

The European Central Bank held its key interest rate steady at 3.5% on Thursday but set the stage for an increase next month.

ECB President Jean-Claude Trichet told reporters that "strong vigilance" was needed on price risks. Each of the last six times he has used the word vigilance, a rate increase was handed down the next month.

Read more at FIN24.co.za