National Bank of Serbia reviews weekly market moves marked by ECB rate rise and declines in oil and gold

The National Bank of Serbia has published a weekly review of global financial market developments for June 8-12, highlighting that the European Central Bank raised its key interest rates by 25 basis points while market pricing was driven largely by shifts in Middle East tensions and related energy-price expectations. In the review, the euro strengthened 0.37% against the U.S. dollar over the period to 1.1575, while U.S. and German government bond yields declined and risk sentiment improved toward the end of the week on expectations of a possible U.S.-Iran agreement. The ECB increased its deposit facility rate to 2.25%, the main refinancing rate to 2.40% and the marginal lending rate to 2.65%, citing stronger inflation pressures linked to the war in the Middle East. The review also noted that U.S. Treasury yields fell, with the 2-year at 4.08% and the 10-year at 4.48%, while German yields declined to 2.62% on the 2-year and 2.99% on the 10-year. In emerging markets, Central and Eastern European currencies mostly strengthened against the euro, led by the Hungarian forint, and local-currency 2032 bond yields mostly fell. Commodity prices moved lower over the week, with Brent down 6.19% to 87.33 USD/bbl and gold down 2.95% to 4,216.52 USD/oz by period-end.