Bond markets testing the ECB

The account of April’s ECB meeting (published on Friday) reiterated that policymakers intended to preserve favourable financing conditions, but bond yields have continued to rise since then. That might partly be justified by an improved economic outlook, and we expect the flash PMIs for May (released next week) to show a continued improvement. Nevertheless, we don't expect further substantial increases in government bond yields.
Jack Allen-Reynolds Senior Europe Economist
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