* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr
LONDON, Aug 20 (Reuters) - Benchmark German yields on Thursday held close to the one-week lows they reached the day before as a summer lull kept traders on the sidelines.
The Federal Reserve minutes released on Wednesday sent Treasuries lower, but after the Wall Street indexes retreated from all-time highs, U.S. yields fell and their European counterparts followed.
The German 10-year Bund yield was last steady at -0.46% after falling to -0.49% the day before. Italian 10-year BTP yields were flat at 0.98%.
“It looks like markets are indeed still in the summer mode. There’s a bit of impetus coming from here and there...but this morning there’s a very slow start. We think the -0.5% is likely to stay in sight,” said Rainer Guntermann, rates strategist at Commerzbank.
Several Federal Reserve policymakers think the U.S. central bank may need to ease monetary policy further to nurse the economy through the COVID-19 pandemic, Fed minutes revealed.
But they also indicated that yield caps, or targets, were not on the horizon, breathing some strength into yields.
A line-up of government bond issuance is scheduled for Thursday, with France on the list.
Guntermann said it was unusual for the French debt office to tap the markets in August, but given the high rate of absorption so far by investors, they have decided to stick to their normal funding pattern of heavy borrowing, he said. (Reporting by Olga Cotaga; editing by Barbara Lewis)
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