German, UK bonds gain on Eurozone inflation drop

Mittwoch, 31. Juli 2019 17:46

Benchmark sovereign securities in Europe rallied on Wednesday toward the end of trading, knocking yields lower before the monetary policy update from the United States Federal Reserve. Germany's 10-year yield hit a record low as mixed macro data on the domestic level against indications of a rebound in the US economy prompted bets that the European Central Bank would need to deepen stimulus measures and begin a race to the bottom with peers.

Consumer confidence in the United Kingdom improved marginally and home price growth slowed in July. While Germany saw the biggest monthly jump in retail sales in almost 18 years last month, Consumer price inflation slowed to 1.1% this month from 1.3% and the core reading came in at just 0.9%, down by 0.2 points from June.

Germany's two-year yield slumped 1.8 basis points to 0.771% under zero at 5:42 pm CET. The 10-year rate plunged 3.7 points to a negative 0.434%. The yield on the 30-year bonds nosedived 5.3 points to 0.122%. Corresponding futures jumped 0.03%, 0.32% and 1.05%, respectively. British yields on debt due in two, ten and thirty years fell 8.4 points to 0.425%, 2.4 to 0.613% and 3.8 points to 1.319%, respectively.

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