Bund yields drop as investors track oil, seek safety on AI concerns
TLT•Germany’s 10-year Bund yield fell 8.5 basis points to 3.38%, its lowest since September 9, as stocks sold off over AI concerns. French and Italian spreads tightened, while oil prices fell more than 1%.
1. Bund yields fall
Germany’s 10-year government bond yield, the euro area benchmark, fell 8.5 basis points to 3.38% on Thursday, after touching its lowest level since September 9. The two-year yield dropped 5 basis points to 3.05%.
2. Spreads and markets
French spreads over Bunds narrowed 5 basis points to 137 basis points, while Italian spreads fell 3 basis points to 105 basis points. The moves followed a sell-off in technology stocks and wobbling credit markets as investors reassessed crowded bets on data centres and other AI infrastructure amid debt concerns. Oil prices fell more than 1%, and euro-area rate-path pricing remained roughly unchanged.
3. Data and bond sales
France and Spain were due to sell up to €17.5 billion of bonds in the two- to seven-year sector. Investors were also watching US data on consumer spending and producer prices, which could inform the next Personal Consumption Expenditures inflation report.
