German, UK bonds trade higher as stocks retreat

Tuesday, 19. February 2019 12:53

Prices of sovereign debt securities issued by the United Kingdom and Germany rose on Tuesday, meaning yields were pushed higher, but mostly on the longer end of the curve. The euro and the pound slipped against the dollar and spot gold showed a slight gain. Stocks in the main European exchanges traded with losses. Sentiment was largely driven by HSBC's disappointing annual earnings report and warnings on Brexit and China's economic slowdown, together with Honda's decision to shift production out of the UK.

The German two-year yield moved marginally lower to a negative 0.562% at 12:50 pm CET. It compares to a drop of 1.7 basis points to 0.099% for the 10-year Bund. The benchmark earlier touched 0.087%, the lowest point on a closing basis since October 2016. The yield on the 30-year bond fell 1.7 points to 0.725%. Corresponding futures were down 0.01% and higher by 0.11% and 0.32%, respectively.

The British two-year securities yielded 0.72% or just 0.3 points less for the day. The 10-year gauge declined 1.2 points to 1.055% and the 30-year yield slipped 0.6 points to 1.676%.

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