Reuters reports that Dutch central bank chief Klaas Knot said that the euro zone economy is on course for a robust recovery in the second half of the year that could allow European Central Bank to start phasing out its emergency bond purchases in the third quarter.

"If the economy develops according to our baseline, we will see better inflation and growth from the second half onwards," Knot said. "In that case, it would be equally clear to me that from the third quarter onwards we can begin to gradually phase out pandemic emergency purchases and end them as foreseen in March 2022."

The ECB stepped up bond buying last month under its 1.85 trillion-euro Pandemic Emergency Purchase Programme, worried that rising yields, mostly a spillover from a U.S. Treasury selloff, could derail the bloc's eventual recovery.

"To the extent that higher nominal yields are driven by better inflation and growth prospects, to me that's entirely benign," he said. "If real rates are roughly constant, it means that higher nominal rates are entirely due to higher inflation expectations and that is something I'm comfortable with."