Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  News  >  Interest Rates

News : Interest Rates

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance ProfessionalsCalendarSectors 

Brexit progress takes shine off safe-haven euro zone bonds

share with twitter share with LinkedIn share with facebook
share via e-mail
0
12/08/2017 | 05:45pm CEST
Britain's Prime Minister Theresa May and European Commission President Jean-Claude Juncker hold a news conference at the EC headquarters in Brussels

LONDON (Reuters) - Borrowing costs across the euro zone rose on Friday as a breakthrough in divorce talks between Britain and the European Union took the shine off safe-haven bonds.

The European Commission said on Friday enough progress had been made in Brexit negotiations with Britain for a second phase of negotiations to begin, ending an impasse over the status of the Irish border.

In the United States, meanwhile, Congress moved rapidly on Thursday to send President Donald Trump a short-term funding bill to avert a government shutdown this weekend.

That set the backdrop for world markets, with investors dumping safe-haven bonds and snapping up risk assets.

Germany's 10-year bond yield rose 1 basis point to 0.30 percent, up slightly from three-month lows hit this week at 0.29 percent.

"Bund yields had slipped below 30 basis points this week, so prices were already at high levels and that was in part because of risk aversion," said Daniel Lenz, rates strategist at DZ Bank.

"Now that risk aversion is abating as we see the first breakthrough in Brexit negotiations. We also appear to have a solution to U.S. budget talks."

Britain's 10-year bond yield jumped up 7 basis points to 1.32 percent in early trade before settling back down at 1.27 percent by late afternoon .

Most other long-dated bond yields in the bloc finished the day at 1 to 2 bps higher. Peripheral bonds, which tend to benefit from a pick-up in risk appetite, outperformed their higher-rated peers and were 2 to 3 bps lower.

November U.S. labour data showed that job growth in the world’s biggest economy increased at a strong clip in November but wage growth was a touch lower than expected.

"Because the average hourly earnings were lower than expected, we saw a bit of downward pressure on yields. I think it is more important than the jobs number, as it is a leading indicator of inflation," said Mizuho strategist Antoine Bouvet.

The yield on 10-year U.S. Treasuries also dipped slightly before rising again on this mixed picture.

For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets

(Reporting by Dhara Ranasinghe, Additional reporting by Abhinav Ramnarayan & Fanny Potkin; Editing by Gareth Jones)

By Dhara Ranasinghe

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news "Interest Rates"
07/13German, Belgian and French bond yields hit fresh lows as safety bid expands
RE
07/13Federal Reserve Report Defends Use of New Tools to Set Interest Rates
DJ
07/13Bank of England's Cunliffe sees case for 'stodginess' in setting interest rates
RE
07/13Chinese hotel denies raising rates for Americans amid trade war
RE
07/12Investors Bet on Higher Rates as U.S. Inflation Firms
DJ
07/12Euro zone bond yields fall after dovish ECB minutes, German curve flattens
RE
07/12Investors Bet on Higher Rates as U.S. Inflation Firms
DJ
07/12ECB sees rates at record low levels for as long as needed - minutes
RE
07/11Euro zone bond yields fall as U.S. raises stakes in China trade row
RE
07/10Italy's bond yields pushed up by eurosceptic's remarks
RE
Latest news "Interest Rates"
Advertisement