German, UK bonds jump, yields dip to record lows

Wednesday, 07. August 2019 14:14

Concerns about the possibility of a global currency war and a recession in Germany or even on the world scale were clearly on traders' minds on Wednesday in massive repositioning. Sovereign debt securities issued by Germany and Britain surged, taking yields to the lowest levels on record, even though stocks were significantly higher in midsession on European markets. The Eurozone's largest economy and export powerhouse suffered the largest drop in industrial production on an annual scale in nearly a decade in June. Several central banks have cut interest rates after the United States designated China a currency manipulator.

Germany's two-year yield slumped 2.6 basis points to a negative 0.836% at 2:12 pm CET after reaching minus 0.841% for the first time. The entire curve was negative as the 10-year rate dipped 6.1 points to 0.592 under zero. Earlier it touched 0.597% under the neutral level. The 30-year gauge was 7.6 points in the hole at a negative 0.116% or 2.1 points shy of today's record low. Corresponding futures jumped 0.05%, 0.47% and 1.27%, respectively.

The United Kingdom's two-year yield slipped one point to 0.414% but stayed above its all-time low. The measure was down 7.4 points at 0.442% after hitting 0.433%. The 30-year yield sunk 9.4 points to 1.097% following a dip to 1.087%.

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