Eurozone periphery bonds trade modestly lower ahead of ECB policy decision

The Eurozone periphery bonds traded modestly lower Thursday ahead of the European Central Bank (ECB) monetary policy meeting.

The French 10-year bond yields, which moves inversely to its price, rose 1-1/2 basis points to 0.322 percent, Irish 10-year bonds yield climbed 1/2 basis point to 0.499 percent, Italian equivalent bounced nearly 1 basis point to 1.452 percent, Netherlands 10-year bonds yield inched 1-1/2 basis points higher to 0.149 percent and the Spanish 10-year bonds yield jumped 1-1/2 basis points to 1.124 percent by 10:40 GMT.

The European Central Bank (ECB) is scheduled release its monetary policy decision on Thursday, 20th October and we foresee that the central bank to keep policy steady and wait until December to unveil a possible extension and tweaks its Quantitative Easing programme. Additionally, President Mario Draghi's presser will be scrutinized closely as investors assess both the scope for further easing and eventual tapering.

The ECB generally makes any significant policy decisions in conjunction with its new economic forecasts released in the last month of each quarter. Draghi's press conference could bring some clues about what to expect in December, but for the most part he should maintain an easing bias without delivering any specific signals.

Meanwhile, the pan-European STOXX 600 index was down 0.07 percent and the euro-area blue-chip gauge the STOXX 50 climbed 0.28 percent, the DAX traded 0.19 percent higher and the CAC-40 rose 0.17 percent by 10:50 GMT.