Eurozone's recovery remains on track: ECB

Frankfurt

AN increase in long-term bond yields hasn't affected the policy stance of the European Central Bank (ECB) and euro-area financial conditions remain "highly supportive" for the economic recovery, executive board member Benoit Coeure said.

The rise in yields appears to reflect market participants pricing out the risk of deflation, which was "certainly good news", he said on Tuesday, citing an ECB analysis of inflation-linked swap rates. Uncertainty about future fiscal and trade policies in some countries may have contributed to an increase in term premia, though coupled with a better assessment of global economic prospects that doesn't amount to an unwarranted tightening.