German, UK bonds slip as stocks extend gains

Tuesday, 23. July 2019 11:13

Benchmark sovereign debt securities in Europe declined on Tuesday and yields advanced on the strengthening in risk appetite. The safe haven asset class posted losses together with precious metals parallel to an acceleration in the rise in stocks as traders were waiting for a monetary policy update from the European Central Bank due on July 25. Rate-setters have expressed willingness to lower borrowing costs and reintroduce stimulus.

As of the yield curve, German longer-term bonds fell substantially, against a notable drop in two-year notes issued by the United Kingdom. The Conservative Party was due to announce who its next leader and British prime minister. In other news, the United States announced it would lift the caps on spending, after a long dispute between the government and opposition.

Germany's two-year yield grew slightly to 0.766% under zero at 11:13 am CET. The 10-year rate was up at a negative 0.338% and the yield on 30-year bonds jumped 1.6 basis points to 0.261%. Corresponding futures prices were down 0.01%, flat and 0.19% in the red, respectively. Yields on the UK's debt maturing in two, ten and thirty years rose 2.6 points to 0.568% and just 0.4 points to 0.714% and held little changed at 1.328%, respectively.

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