German, UK bonds decline on gains in stocks

Monday, 11. February 2019 11:48

Safe haven assets were dumped on Monday during the morning session on European exchanges, following the continuation of a rebound in equities in China after a week-long holiday. The euro and the pound registered modest losses against the dollar, which advanced across the board, and benchmark government debt securities including United States Treasuries dropped as investors favored stocks. Precious metals, the yen and the Swiss franc all traded in the red. Market participants were focusing on any incoming information on the talks between China and the US and the Republicans and Democrats in Congress in Washington.

The German yield curve steepened, which means prices of longer-dated paper fell more and pushed yields higher than at the near side of the maturity chart. The two-year note yield slipped to a negative 0.576% at 11:44 am CET, compared to a jump of 1.7 basis points to 0.106% for the ten-year Bunds. The yield on the 30-year bonds surged 2.3 points to 0.724%. Corresponding futures lost 0.01%, 0.14% and 0.41%, respectively.

The British two-year yield rose 1.5 points to 0.722%. The gauge was 2.3% higher for the ten-year gilts, at 1.063%, while the 30-year yield added 1.3 points to reach 1.686%. The yield on Italy's debt due in ten years slumped 5.6 points to 2.913% against the backdrop of a surge in banking shares.

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