German bond curve flattens more as longer-maturity yields drop

LONDON: German bond yields extended their decline on Wednesday, led by falling yields on longer-maturity debt as a global trend of flattening yield curves gathered momentum.

Yields on ten-year German government debt dropped by two basis points to 0.31 percent.

As a result, the spread between the yield of two- and 10-year maturities tightened to their narrowest since early-July at 108 basis points.

While the global economy is enjoying a rare spot of strong growth in three of the world's biggest economic engines - the United States, Europe and China - the flattening curve suggests investors have doubts over the future path of inflation and may even be starting to price in the next slowdown.