German, UK bonds rally as equities slip

Thursday, 16. May 2019 11:10

Investors turned mostly to British and German sovereign bonds for protection from risk on Thursday even though stocks posted only small losses. Traders took profits after yesterday's rally, spurred by a report the United States would delay the introduction of tariffs for import cars from the European Union.

Yields continued higher as China denied there are any plans for a visit by a trade delegation from Washington. Italy's paper swung to strong gains as Deputy Prime Minister Luigi Di Maio stressed his Five Stars Movement wouldn't allow a rise in public debt.

Germany's two-year yield was little changed at a negative 0.654% at 11:07 am CET. The 10-year Bund rate dropped 1.7 basis points to minus 0.111% after tumbling even below Japan's and hitting 0.13% under zero yesterday for the first time since July 2016. The yield on the 30-year bonds decreased by 2.2 points to 0.511%. Equivalent futures prices were up by 0.01%, 0.1% and 0.35%, respectively. The United Kingdom's two-year yield fell 2.2 points to 0.712%. The ten-year gauge dropped three points to 1.04% and the yield on the 30-year bonds was off 2.9 points at 1.585%.

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