BAFL 45.66 Increased By ▲ 0.56 (1.24%)
BIPL 20.08 Decreased By ▼ -0.17 (-0.84%)
BOP 5.34 Decreased By ▼ -0.06 (-1.11%)
CNERGY 4.54 Increased By ▲ 0.01 (0.22%)
DFML 16.01 Increased By ▲ 0.33 (2.1%)
DGKC 78.62 Increased By ▲ 5.74 (7.88%)
FABL 27.80 Increased By ▲ 0.65 (2.39%)
FCCL 18.86 Increased By ▲ 1.21 (6.86%)
FFL 8.96 Decreased By ▼ -0.13 (-1.43%)
GGL 12.85 Increased By ▲ 0.21 (1.66%)
HBL 111.54 Increased By ▲ 0.88 (0.8%)
HUBC 122.23 Increased By ▲ 0.71 (0.58%)
HUMNL 7.69 Increased By ▲ 0.34 (4.63%)
KEL 3.29 Increased By ▲ 0.06 (1.86%)
LOTCHEM 27.80 Increased By ▲ 0.48 (1.76%)
MLCF 42.36 Increased By ▲ 3.03 (7.7%)
OGDC 110.37 Increased By ▲ 2.37 (2.19%)
PAEL 18.97 Increased By ▲ 1.41 (8.03%)
PIBTL 5.46 No Change ▼ 0.00 (0%)
PIOC 114.91 Increased By ▲ 6.91 (6.4%)
PPL 94.72 Increased By ▲ 2.97 (3.24%)
PRL 25.32 Increased By ▲ 0.44 (1.77%)
SILK 1.10 Increased By ▲ 0.02 (1.85%)
SNGP 64.32 Increased By ▲ 1.22 (1.93%)
SSGC 12.26 Increased By ▲ 0.37 (3.11%)
TELE 8.36 Increased By ▲ 0.17 (2.08%)
TPLP 13.35 Increased By ▲ 0.24 (1.83%)
TRG 83.84 Increased By ▲ 2.23 (2.73%)
UNITY 25.89 Increased By ▲ 0.14 (0.54%)
WTL 1.54 Increased By ▲ 0.02 (1.32%)
BR100 6,308 Increased By 126.6 (2.05%)
BR30 21,973 Increased By 434.1 (2.02%)
KSE100 61,691 Increased By 1160 (1.92%)
KSE30 20,555 Increased By 366.1 (1.81%)
Business & Finance

Euro zone bond yields dip as caution returns

  • Bond yields rose on Monday after an extension of trade talks between Britain and the European Union eased fears of a messy parting of ways between the two.
Published December 15, 2020

LONDON: Euro zone bond yields dipped on Tuesday as concerns about rising COVID-19 cases in major economies offset the promise of a return to normality due to a vaccine and cautious optimism about Brexit trade talks.

Bond yields rose on Monday after an extension of trade talks between Britain and the European Union eased fears of a messy parting of ways between the two.

But the selling in bond markets was modest, with yields inching back down early on Tuesday as the latest coronavirus news injected a fresh dose of caution into world markets.

Germany's benchmark 10-year bond yield dipped to -0.627pc , nearing recent one-month lows of around -0.64pc.

Italy will need to impose new restrictions during the holiday season to rein in contagion and avoid a third, devastating wave of the coronavirus, the prime minister said in an interview published on Tuesday.

Germany, Europe's biggest economy is unlikely to lift its lockdown early next year, a top aide to Chancellor Angela Merkel said on Monday. London, meanwhile, will move into England's toughest tier of restrictions on Wednesday.

"The market remains wary of the light at the end of the tunnel," said Commerzbank rates strategist Rainer Guntermann.

"While Bunds remain torn between vaccine hopes and lockdown concerns, spreads continue to tighten as the ECB 'preserves favourable funding conditions'," he added, referring to hefty European Central Bank stimulus that has pinned down borrowing costs.

In southern Europe, Spain's 10-year bond yield touched a new record low of -0.004pc. Italy's 10-year bond yield was a touch lower on the day at 0.50pc, also keeping record lows in sight. That left the gap over benchmark German Bund yields hovering around 112 basis points.

Antoine Bouvet, a senior rates strategist at ING, said the current backdrop was also favourable for a near-term tightening in the gap between U.S. and European bond yields.

"Barring an imminent trade deal, Brexit optimism should slowly deflate, leading to lower rates," he said.

"Recent lockdown announcements suggest that gloom will persist on both sides of the Atlantic, and drive a temporary re-tightening of the U.S. and euro rates differential."


Comments are closed.

Euro zone bond yields dip as caution returns

Pakistan’s trade deficit narrows 34% to $9.38bn in 5MFY24

KSE-100 conquers 61,000 after single-day gain of 1,160 points

COP28: UAE president announces $30bn fund to bridge climate finance gap

Israel resumes Gaza attacks as truce expires, heavy fighting reported

Inter-bank: rupee records 4th consecutive gain against US dollar

Open-market: rupee continues to strengthen against US dollar

PCB includes Salman Butt in selection panel, decision draws criticism

ECP refutes Babar Awan’s statement about KP’s seats being reduced

COP28: Caretaker PM Kakar arrives at Dubai Expo City

Supreme Court seeks govt reply on plea against expulsion of Afghans, says petitioner