Sept 4 (Reuters) - Ultra-long euro zone government bond
yields edged down on Thursday after weak U.S. data and dovish
remarks from Fed Governor Christopher Waller.
In the euro area, investors remained concerned about rising
public debt and increased bond supply, with France's government
facing a likely collapse next week over a contested budget vote,
while Germany is ramping up fiscal spending.
As investors worried about the debt levels of European
countries, ultra long-dated government bonds have come under
selling pressure. Markets expect Germany's investment plans,
along with likely increases in defence spending across euro area
countries, to push up debt.
The German 10-year bond yield, the benchmark for
the euro zone bloc, dropped one basis point to 2.74%. Yields on
30-year bonds were down 1.5 bps at 3.34%.
U.S. borrowing costs edged up on Thursday after falling
sharply on Wednesday following data that showed job openings
fell in July.
France's 30-year bond yield fell one bp to
4.45%. It hit 4.523% on Tuesday, its highest since June 2009.
The yield gap between 10-year French government bonds
and safe-haven German Bunds - a market gauge of
the risk premium investors demand to hold French debt - stood at
81 bps after reaching more than 82 bps last week.
French Finance Minister Eric Lombard said the government
would have to compromise on plans to cut the budget deficit if
Prime Minister Francois Bayrou is toppled in a confidence vote
on September 8, the Financial Times reported on Wednesday.
Spain's 30-year government bond yields were down
one bp at 4.24%. They reached 4.32% on Tuesday, their highest
since November 2023.
Italy's 10-year yield was flat at 3.64%, and the
gap between Italian and German bunds was at 90
bps. Italy's 30-year yields fell 1.5 bps to 4.60%.