UK, German bonds jump amid no-deal Brexit fears

Monday, 29. July 2019 17:29

Increased bets on the United Kingdom's disorderly pullout from the European Union enhanced concern on Monday about the impact on the economy on both sides of the English Channel, pared with downbeat statistical and survey data. Investors turned to sovereign debt paper, lifting prices and lowering yields. As the pound plunged, stocks jumped in London upon benefits from depreciation on companies listed in the UK, while equities in the Eurozone were flat to lower before the closing bell.

Signals from the Bank of England and the drop in the annual growth rate in consumer credit last month from 5.7% to 5.5%, the lowest level since April 2014, propped up expectations of an interest rate cut for this year. Earlier, retailers reported the decline in sales reached the longest in eight years in July.

Germany's two-year yield slipped slightly to a negative 0.761% at 5:25 pm CET but the 10-year rate dropped 1.6 basis points to 0.39% under zero, near a record low. The 30-year Bund yield tumbled 2.8 points to 0.182%. Corresponding futures were up by 0.02%, 0.09% and 0.29%, respectively. Yields on British debt due in two, ten and thirty years fell 2.3 points to 0.518%, 3.5 to 0.654% and half a point to 1.343%, respectively.

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