Mr Cœuré reviewed the latest financial market developments. Since the Governing Council’s monetary policy meeting on 25-26 October 2017, a significant flattening of the US Treasury yield curve had been observed, while the German government bond yield curve had flattened to a much lesser extent. In the United States the yield curve was at its flattest in almost a decade, with the ten-year Treasury bond yielding less than 60 basis points above the two-year Treasury bond, whereas at the start of 2017 the spread between the yields of the two bond maturities had been 125 basis points. The spread between German government b ... (full story)

The European Central Bank should revisit its communication stance in early 2018 and gradually adjust its language to reflect improved growth prospects, the accounts of the bank’s December policy meeting showed on Thursday. A change in the ECB’s policy message would likely be taken by investors as a sign that rate-setters are getting ready to wind down their 2.55 trillion euros bond-buying programme, the key plank of their stimulus policy for the past three years. “The language, pertaining to various dimension of the monetary policy stance and forward guidance could be revisited early in the coming year,” the accounts ... (full story)