The installation of new equipment, which was judged necessary at the beginning of the year, is taking place only very gradually, in particular at small and medium-sized companies. Retail activity perked up considerably in May. Employment levels in industry showed little change, except for the automobile industry where cutbacks continued. They fell slightly in the building sector, whilst holding steady in the retail and market services sectors. Permanent staff levels showed no significant change, although certain companies - primarily those engaged in seasonal activities as in the food-processing industry - made increased use of temporary staff. BIS Review 66/1997
Abstracting from credit and liquidity risk, the most prevalent source of risk for longterm debt is duration risk: that is, the sensitivity of the bond price to changes in the yield curve. I will come back to this when discussing the duration channel of large-scale central bank asset purchases. [11] Monetary policy exerts its effects on the yield curve not only through pure rate expectations but also through term premia. Chart 4 shows a model-based estimate of the yield curve response to a change in policy rates for the euro area. [12] The surprise used here is a combination of what I previously described as a pure rate surprise and a forward guidance surprise. It therefore affects yields across all maturities. While Chart 4 shows that changes in rate expectations explain the bulk of the yield curve response, part of it is attributable to changes in term premia. Chart 4 Instantaneous impact of conventional policy surprise on expectations and term premia (basis points)  Source: ECB calculations. Notes: The chart depicts the instantaneous impact of a conventional monetary policy surprise on the yield curve and its components. The policy surprise is identified through high-frequency changes in the common component of a set of euro area short-term interest rates of maturities up to one year. The surprise (normalised so that the one-month rate is reduced by 10 basis points) thus captures effects beyond a pure target rate surprise. These effects may be interpreted as a signalling element of conventional monetary policy.