Analyst: The European Central Bank's interest rate cut has curbed the rise in long-term bond yields

Swedish Nordic SEB Bank analyst Hilja Ning said in a report that the European Central Bank's interest rate cuts are currently helping to alleviate the upward pressure on long-term government bond yields brought about by Germany's more expansionary fiscal policy. "However, once the market is convinced that the European Central Bank has completed its cycle of interest rate cuts, this situation may change rapidly." He said that at that time, the market focus will shift to when to raise interest rates for the first time, which is expected to start driving up long-term interest rates.

He stated that for investors, this means there is no structural downside space for eurozone long-term government bond yields and any decline should be seen as an opportunity to buy into rising long-term rates.