Jan 19 (Reuters) - Euro zone government bond yields
edged lower on Monday as some investors moved into safe-haven
assets after U.S. President Donald Trump threatened to slap
extra tariffs on eight European nations until the U.S. was
allowed to buy Greenland.
European Union ambassadors reached broad agreement on Sunday
to intensify efforts to dissuade Trump from imposing the
tariffs, while also preparing retaliatory measures should the
duties go ahead.
Germany's 10-year yields were down 2 basis
points (bps) at 2.82%. They rose 1.3 bps last week.
The yield on the benchmark U.S. 10-year Treasury note
rose 7 bps to 4.233% on Friday, its highest since
September 3, as investors assessed mixed economic data and
unprecedented pressure on the Federal Reserve from the White
House to lower interest rates.
The U.S. market will be closed on Monday for Martin Luther
King Jr. Day.
German 2-year yields, more sensitive to
expectations for monetary policy rates, fell 4 bps to 2.08%.
Italy's 10-year government bond yields dropped
0.5 bps to 3.43%, with the gap versus German Bunds widening to
58.50 bps, after hitting 53.50 bps late Friday, its narrowest
level since August 2008.
Spain's spread versus Bund yields was at 38.50 bps after
dropping to 36.9 bps on Friday, the narrowest since summer
2008. Portugal's and Greece's spreads were also widening from
their narrowest in almost two decades.