German, UK bonds fall as investors favor stocks

Monday, 01. April 2019 14:02

The rise in equities on Monday, prompted by favorable macroeconomic data from China with the focus on manufacturing, damaged the appeal of benchmark government bonds and precious metals. Prices of sovereign debt securities issued in Berlin and London dropped, which means yields jumped. The pound rallied, also on the back of a report on factory output. As traders were waiting for information on retail sales and construction spending in the United States for last month and the results of local manufacturing surveys, Treasuries suffered more substantial losses. As China's Vice Premier Liu He came to Washington to continue bilateral negotiations, fragile optimism on trade was holding up.

Germany's two-year note yield advanced by 1.3 basis points to a negative 0.593% at 1:57 pm CET. The rate for 10-year Bunds surged 3.2 points to minus 0.036%, flirting with the breakeven line for the first time in ten days. The yield on 30-year bonds climbed 3.9 points to 0.611%. Corresponding futures were up by 0.01% ,0.25% and 0.69%, respectively.

The yields on the United Kingdom's two-year notes were 2.2 points higher at 0.667%, compared to the increase of 1.9 to 1.016% for 10-year gilts. The 30-year measure grew 1.4 points for the day, to 1.567%.

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