By Abhinav Ramnarayan
LONDON, Sept 3 (Reuters) – German 30-year government bond yields saw their gap over benchmark Bunds hit the widest level in around two months on Friday as euro zone business surveys signposted a rapidly recovering economy.
Purchasing Managers’ Index (PMI) surveys for the services sector in Italy, France, Germany and the euro zone came out early on Friday, all pointing to healthy growth.
Euro zone government bond yields have been rising in recent weeks with inflation and economic indicators in the single currency bloc beating expectations. Investors are betting that the ECB will have to begin the debate about ending the pandemic emergency purchasing programme (PEPP).
“The service sector has remained resilient in the face of a resurgence in Covid-19 cases,” ING analysts said in a note, adding that manufacturing has been hit by supply chain disruptions.
The gap between Germany’s 10- and 30-year bond yields hit 50.5 basis points on Friday…