Euro zone bond yields dip as tech jitters send traders to safety
TLT•Euro zone bond yields fell as a tech-stock selloff prompted flows into government debt. Germany’s 10-year yield dropped 5 basis points to 3.43%, while the U.S. 10-year yield fell 5 basis points to 5.20%.
1. Yields fall on safe-haven demand
Euro zone bond yields, particularly on longer-dated bonds, fell alongside Treasury yields as a selloff in tech stocks drove some flows into government debt. Germany’s 10-year yield dropped 5 basis points to 3.43%, outpacing a 3-basis-point decline in its 2-year yield to 3.09%. The German 10-year yield had reached 3.65% in late September and early October, its highest since 2009.
2. Markets watch inflation data
France’s 10-year yield fell 8 basis points to 4.82%, and Italy’s dropped 6 basis points to 4.52%; the U.S. 10-year yield fell 5 basis points to 5.20%. The spread between French and German debt was 140 basis points. Investors were looking ahead to U.S. CPI data, among the last key releases before the Federal Reserve’s rate decision. Markets did not expect a rate hike that month, but a hot inflation reading could change that.
