Euro zone bond yields dip as tech jitters send traders to safety
TLT•Germany’s 10-year bond yield fell 5 basis points to 3.43% as tech-stock jitters sent some flows to government debt. The 10-year Treasury yield dropped 6 basis points to 5.18%, while France’s fell to 4.85% and Italy’s to 4.55%.
1. Yields fall across markets
Germany’s 10-year bond yield, the euro zone benchmark, fell 5 basis points to 3.43%, while its 2-year yield dropped 3 basis points to 3.09%. The bond rally also included a 6-basis-point decline in the 10-year Treasury yield to 5.18%, a 5-basis-point fall in France’s 10-year yield to 4.85%, and a 3-basis-point drop in Italy’s to 4.55%.
2. Tech jitters spur flows
Renewed jitters in technology stocks helped prompt some flows into government bonds. South Korea’s tech-heavy KOSPI fell more than 5%, while Nasdaq 100 futures lost 0.7%.
3. French debt spread
Bond-market turmoil had eased in recent sessions, but bonds remained fragile after a selloff in late September and early October pushed Germany’s 10-year yield to 3.65%, its highest since 2009. The spread between French and German debt was 140 basis points, with investors concerned that political jostling ahead of next year’s presidential election may hinder France’s efforts to reduce its high deficit.
