UK, German bonds fall before US inflation data

Thursday, 11. July 2019 14:26

Investors sold off the government debt of Germany and the United Kingdom on Thursday, sending yields higher, ahead of consumer price inflation data for the United States for June, which Federal Reserve Chair Jerome Powell highlighted as one of the most important reports for the next monetary policy update. US Treasury securities were little changed. At the same time, the dollar dropped against the euro and the pound while precious metals surrendered most of the daily gains. Earlier, the Bank of England warned again of economic disturbances in case of no-deal Brexit while German inflation came in stronger for June than in flash data.

While the German two-year yield was little changed at 0.732% below zero at 2:21 pm CET, the ten-year rate surged 3.6 basis points to a negative 0.268%. The yield on the 30-year bonds skyrocketed by 5.7 points to 0.36%. Corresponding futures prices, which move inversely to yields, fell 0.01%, 0.33% and a stunning 1.08%, respectively.

The British two-year yield advanced 0.28 points to 0.673% compared to a jump of 5.8 points to 0.819% for gilts maturing in a decade. The 30-year yield was 3.9 points higher at 1.419%.

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