Benchmark UK, German bonds trade lower

Friday, 01. February 2019 11:47

The yield curve for sovereign debt securities issued by Germany and the United Kingdom steepened moderately on Friday, meaning the gap between yields on shorter maturities and the far end of the line increased. The European Union has accepted visa-free travel for British citizens when the country withdraws from the bloc.

The pound fell as factory activity in the United Kingdom strengthened at a lower pace in January, with the expansion being attributed to stockpiling in the runup to the Brexit deadline. German manufacturers reported the first decline in more than four years. The Eurozone saw a drop in inflation to 1.4% and the core reading strengthened back to a mere 1.1%. The European Union made steel barriers permanent.

The yield on the two-year German note was nearly flat at a negative -0.567% at 11:43 am CET. The 10-year benchmark Bund yielded 0.164% or 1.1 points more for the day, compared to the rise of 1.7 points for the 30-year measure. Prices of corresponding futures were unchanged and down by 0.11% and 0.31%, respectively. The UK's two-year yield weakened 1.1 points to 0.756%, while the yield on the 10-year gilt added one point to reach 1.118% and the 30-year yield grew 1.2 points to 1.732%.

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