Euro Spikes as US Treasury Boosts Bond Buybacks

The EUR/USD currency pair spiked higher against the US Dollar following an announcement from the US Treasury to increase buyback volumes of longer-dated Treasury bonds.

This move flattened the bond curve and pulled the 10-year yield below its peak on Tuesday, reaching 4.64% currently.

The effect on European yields was only partial, as primary issuance remains active in the region.

In the US, the Federal Reserve's (FOMC) minutes from the July meeting showed no major surprises, but views on inflation diverged among participants.

In the euro area, final inflation data confirmed a 2.9% year-over-year increase, with core inflation at 2.5% y/y.