"Us data more influential than ECB decision? An in-depth look at the drivers of eurozone government bond yields"

In today's volatile global financial markets, what any economist or strategist says can be a market bellwether, especially when it comes to core currency pairs such as the euro and the dollar, and key economic indicators such as government bond yields. Recently, Jussi Hiljanen, the chief strategist of euro and dollar interest rates at SEB Research, made a comment that caused quite a stir in the industry. His argument that US data have even more impact on eurozone government bond yields than the ECB's autumn decision seems novel, but it deserves more dissection and criticism.

First, we need to examine whether this assertion by Jussi Hiljanen is an overly optimistic estimate of the direct impact of US data on eurozone government bond yields. Admittedly, as the world's largest economy, the economic data of the United States, especially inflation, employment and other indicators closely related to monetary policy, have a leading role in the global market that cannot be ignored. However, elevating this influence over ECB decisions seems to ignore the complexity of the eurozone's internal economic structure and the ECB's authority as an independent monetary policymaker.

The European Central Bank plays a crucial role in maintaining financial stability and promoting economic growth in the eurozone. The adjustment of its monetary policy has a direct bearing on the euro exchange rate, eurozone government bond yields and the economic prospects of the eurozone as a whole. Thus, simply prioritizing the influence of US data over ECB decisions is a clear underestimation of the ECB's independence and influence, and a disregard for the eurozone's economic autonomy.

Further, movements in eurozone government bond yields are not fully explained by a single factor. In addition to external factors such as US economic data, the eurozone's own economic conditions, inflation expectations, fiscal policy, and market sentiment are all important factors affecting bond yields. For example, inflationary pressures within the eurozone, economic differences between member states, and the ECB's reassessment of its inflation target could have a profound impact on bond yields.

Moreover, global capital flows cannot be ignored. With the deepening of global economic integration, the free flow of capital in the world is becoming more and more frequent. When allocating assets, investors consider the risks and returns of multiple markets, not just the data of one country or region. So attributing moves in eurozone government bond yields solely to US data is clearly an oversimplified way of thinking.

Jussi Hiljanen's prediction that 10-year German Bund yields will trade in a range of 2.10%-2.30% this fall is itself a prediction that needs to be treated with caution. For one thing, uncertainty in financial markets is so high that any small move could set off a chain reaction that could invalidate forecasts. Second, the movement of bond yields is influenced by a combination of factors, including but not limited to monetary policy, economic fundamentals, and market sentiment. The interactions between these factors are complex and volatile and difficult to predict accurately.

More importantly, the expression "temporarily falling below" in the forecast is full of uncertainty. In financial markets, "temporary" often means an elusive window of time from which investors can hardly make effective investment decisions. Therefore, for such a forecast, we should keep rational and cautious, avoid blindly following the trend.

After in-depth analysis of Jussi Hiljanen's viewpoint, it is not difficult to find the logical loopholes behind it. First, he overemphasises the impact of US data on eurozone government bond yields, while ignoring the independence and importance of economic factors within the eurozone. Second, his forecasts for bond yields were overly optimistic and certain, and did not adequately take into account the complexity and uncertainty of financial markets. Finally, his argument lacks sufficient empirical support to be convincing.

In financial market analysis, any point of view should be based on rigorous logical reasoning and sufficient empirical data. The remarks of Jussi Hiljanen are obviously inadequate in this regard. Therefore, when we accept and interpret such views, we should maintain critical thinking, not blindly follow, not superstitious, so as not to be misled.

To sum up, the argument by Jussi Hiljanen, chief euro and dollar rates strategist at SEB Research, about the impact of US data on eurozone government bond yields leaves much to be asked. In today's increasingly complex financial market, we should pay more attention to the comprehensive analysis of multiple factors and avoid exaggerating the role of a certain factor. At the same time, we should be rational and cautious about any forecast and view, and think critically with a scientific attitude and method, so as to make more intelligent investment decisions.