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2022/05/20 / Erste Group Research

Rising interest rates and government budgets

Rising yields on the bond market and foreseeable key interest rate hikes by the ECB raise questions about the sustainability of public finances, especially for those countries that are already highly indebted. Rising yield spreads between bonds of European sovereign issuers could be seen as a sign of increasing market nervousness. Markets are nervous, but in our view, due to other reasons.

Next week, a first flash estimate of the Purchasing Managers' Index for the Eurozone, Germany and France for the month of May will be published. In April, sentiment in the service sector rose above that of industry for the first time in a long time. While service providers are benefiting from the end of the Covid related restrictive measures, industry is suffering from high energy prices and renewed supply bottlenecks.

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General information

AuthorErste Group Research
Product nameWeek ahead
Topic in focusMacro/ Fixed income
Economy in focusEurozone, United States
Currency in focusEuro, US Dollar
Sector in focus-


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