Live Updates > Live Update Details
2026-02-18 16:02:49
[Rumors of Lagarde's Resignation Disrupt Markets, Eurozone Bond Yields Hold Steady at Multi-Month Lows] ⑴ On Wednesday, eurozone bond yields were largely steady, hovering near multi-month lows. Investors were digesting media reports that European Central Bank President Christine Lagarde might step down early. The yield on German 10-year bonds was flat at 2.743%, slightly above the two-and-a-half-month low of 2.725% reached on Monday. ⑵ Attention to Lagarde's future has increased due to a report in the Financial Times. The report stated that Lagarde plans to leave office before next year's French presidential election and hopes that French President Macron and German Chancellor Merz will be key decision-makers in her succession. Macron, having already served two terms, is ineligible to run in the 2027 election. An ECB spokesperson subsequently responded that Lagarde is focused on her duties and has not yet made any decisions regarding the end of her term. ⑶ Market reaction was muted. The yield on Italian 10-year bonds was also roughly flat at 3.356%, close to its lowest level since October last year. The yield on German 2-year government bonds, which is sensitive to interest rate expectations, remained unchanged at 2.054%. (4) Analysts at Danske Bank believe the new president's impact may be limited, as EU leaders have historically focused on maintaining a balance between doves and hawks within the Executive Board. The recent rise in European bond yields is partly due to their correlation with US Treasury yields; weak US inflation data and concerns about artificial intelligence disrupting the stock market have boosted safe-haven demand. Eurozone inflation is currently under control, and the market expects the ECB to remain on hold for the remainder of the year.
