UK, German bonds drop on hope trade war ends

Monday, 25. February 2019 17:22

European stocks surged on Monday as market participants grew optimistic regarding the outcome of the current talks between the United States and China about trade and the protection of intellectual property. The rise in equities showed increased risk appetite, weighing on the valuations of benchmark sovereign bonds and sending yields higher.

US President Donald Trump hinted he may sign a final deal at a planned summit with China's leader Xi Jinping. Mark Rutte, prime minister of the Netherlands, today said he is "convinced" the US and the European Union would overcome their disputes.

The German two-year note dipped and the yield added one basis point to reach a negative 0.557% at 5:20 pm CET. The 10-year Bunds yielded 0.11% or 1.4 points more for the day, compared to the rise of 1.6 points to 0.731% for 30-year maturities. Corresponding futures declined 0.01%, 0.14%, and 0.47%, respectively. The United Kingdom's two-year yield jumped 1.4 points to 0.763% and the 10-year measure rose 1.3 to 1.066%. The yield on the 30-year bonds surged 2.7 points to 1.711%.

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