* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr
AMSTERDAM, Sept 15 (Reuters) - Euro zone bond yields held their ground on Tuesday as investors awaited economic survey data from Germany that could set the tone for September.
Bond yields have been under pressure in the past few sessions after ECB policymakers came out with dovish comments following last week’s policy meeting.
Markets had been expecting a more dovish message from the ECB given the slump in August’s inflation reading and a rapid appreciation of the euro, which could hamper Europe’s economic recovery.
Germany’s ZEW economic sentiment survey, due at 0900 GMT, is expected to dip slightly from last month’s reading, based on a Reuters poll.
“We find it hard to believe a further push higher would resonate with investors given the focus on reinstated lockdown measures but note that sentiment indicators have had a tendency to surprise to the upside,” ING analysts said.
“Rightly or wrongly, markets could see this as the precursor to another strong PMI reading next week.”
Germany and Italy’s 10-year yields were unchanged at -0.47% and 1.02% respectively in early trade.
There was also some focus on Monday’s bond purchase data. The ECB raised its overall bond purchases last week, but purchases under its pandemic emergency programme did not increase following a summer lull, as some market participants had expected, holding at the average level in August.
“The data underscore that the ECB has now probably moved to a steady purchase pace of just above €100bn per month,” Commerzbank head of rates and credit research Christoph Rieger said.
He said this would be below, but close to the average volume the ECB would need to buy in order to use all its remaining purchase envelopes until next June.
In the primary market, Germany is scheduled to raise 4 billion euros from the re-opening of a seven-year bond.
Dutchman Frank Elderson appears to be the front runner for a seat on the European Central Bank’s executive board as central and eastern European countries, who also want the job, have so far not agreed on a single candidate, euro zone officials said.
More broadly, focus remains on the U.S. Federal Reserve meeting on Wednesday.
Reporting by Yoruk Bahceli. Editing by Jane Merriman
Our Standards: The Thomson Reuters Trust Principles.