financetom
Market
financetom
/
Market
/
German bond yields hit six-month low as weak U.S. data shakes markets
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
German bond yields hit six-month low as weak U.S. data shakes markets
Aug 2, 2024 6:17 AM

(Updates after U.S. jobs data)

By Harry Robertson and Stefano Rebaudo

Aug 2 (Reuters) - German government bond yields tumbled

on Friday to their lowest level in around six months as

investors snapped up sovereign debt after weak U.S. economic

data raised fears for global growth and caused stocks to fall

sharply.

Data on Friday showed the U.S. economy added 114,000 jobs in

July, down from 179,000 in June and well below the 175,000

economists expected. The unemployment rate rose to 4.3%, from

4.1%, raising market expectations for Federal Reserve interest

rate cuts this year.

Germany's 10-year bond yield, the benchmark for

the euro zone, extended a decline after the jobs data and was

last down 10 basis points to 2.151%, the lowest since February.

The yield, which moves inversely to the price, was set to

end the week 25 bps lower, the biggest fall since mid-June.

Tensions in the Middle East and Thursday's Bank of England

interest rate cut also burnished the appeal of bonds, although

the debt of euro zone countries that are seen as riskier

investments, such as Italy, fared less well.

"We are seeing strong moves across major markets," said

Emmanouil Karimalis, macro rates strategist at UBS.

"It is a combination of several factors: the BoE cut has set

a more bullish tone this week, while markets are also increasing

their expectations for a Federal Reserve cut," he said.

"The weakness in the stock market, escalating geopolitical

tensions in the Middle East, and a slowdown in European

government bond supply in August are all supportive factors for

European bonds."

Germany's two-year bond yield, which is sensitive

to ECB rate expectations, was last down 12 bps at 2.345%, its

lowest level since January.

Data on Thursday showed U.S. jobless claims rose more than

expected last week to 249,000, the highest since August 2023.

In addition, a measure of U.S. manufacturing activity

dropped to an eight-month low in July amid a slump in new

orders.

Stocks dropped around the world on Friday, with a broad

pan-European index down around 2.2% and U.S. futures

down 1.8%.

Concerns about the global economy led riskier government

bonds to underperform their peers, with the Italian and French

yield spreads versus German bonds widening respectively to 146

basis points (bps), the highest in almost a month,

and to 78 bps, the highest since last month's

French election.

Italy's 10-year bond yield fell 3 bps to 3.612% while

France's was down 5 bps at 2.944%.

Money markets priced in almost 70 bps of further European

Central Bank rate cuts in 2024, from about 50 bps a week ago

.

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Powell's Comments on Monetary Policy Boosts Exchange-Traded Funds, US Equities
Powell's Comments on Monetary Policy Boosts Exchange-Traded Funds, US Equities
Mar 6, 2024
01:00 PM EST, 03/06/2024 (MT Newswires) -- Broad Market Indicators Broad-market exchange-traded funds, including IWM and IVV, were trading higher. Actively traded Invesco QQQ Trust (QQQ) was up 1.1%. US benchmark stock indexes rose after midday Wednesday as Federal Reserve Chair Jerome Powell's remarks to Congress suggested the central bank is not in a hurry to cut interest rates even...
US Benchmark Stock Indexes Rise, Treasury Yields Decline as Powell Leaves Interest-Rate Cuts on the Table
US Benchmark Stock Indexes Rise, Treasury Yields Decline as Powell Leaves Interest-Rate Cuts on the Table
Mar 6, 2024
12:36 PM EST, 03/06/2024 (MT Newswires) -- US benchmark stock indexes rose after midday Wednesday as Federal Reserve Chair Jerome Powell's remarks to Congress suggested the central bank is not in a hurry to cut interest rates even though a reduction is on the cards for this year. The S&P 500 climbed 0.9% to 5,126.3, with the Nasdaq Composite up...
Sector Update: Financial
Sector Update: Financial
Mar 6, 2024
01:34 PM EST, 03/06/2024 (MT Newswires) -- Financial stocks were advancing in Wednesday afternoon trading, with the NYSE Financial Index and the Financial Select Sector SPDR Fund (XLF) each rising around 0.6%. The Philadelphia Housing Index was adding 0.6% and the Real Estate Select Sector SPDR Fund (XLRE) was up 0.5%. Bitcoin (BTC-USD) was increasing 5.5% to $67,309, and the...
Sector Update: Energy
Sector Update: Energy
Mar 6, 2024
01:32 PM EST, 03/06/2024 (MT Newswires) -- Energy stocks rose Wednesday afternoon with the NYSE Energy Sector Index gaining 1.2% and the Energy Select Sector SPDR Fund (XLE) up 1%. The Philadelphia Oil Service Sector index climbed 1.8%, and the Dow Jones US Utilities index added 1%. US crude oil stocks, including those in the Strategic Petroleum Reserve, rose by...
Copyright 2023-2025 - www.financetom.com All Rights Reserved