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Home / Business / The euro zone bond slows down as China's datafan growth concerns

The euro zone bond slows down as China's datafan growth concerns



* Weak shares, China data lifts EZ bonds

* German Bund yields fall from 2 week high

* US 2-year bond yields hit ten-year highs after the Fed meeting

* Eurozone periphery Government bond yields tmsnrtrsrs / 2ii2Bqr

By Dhara Ranasinghe

LONDON November 9 (Reuters) – German 10-year bond yields fell more than two weeks high on Friday, leading to a move lower in most euro area debt yields as weak Chinese Economic data drew concern about global growth prospects.

China's trade port inflation slowed down for fourth month in October to cool domestic demand and production activity, suggesting that Beijing is likely to roll out more stimulus over trade francs with the United States.

The data weighed in the stock markets, boosted the demand for real estate.

It overshadowed a move in card-dated US government bonds to ten-year levels on Thursday after the US Federal Reserve kept interest rates stable, but remained on track to gradually tighten borrowing costs.

Germany's benchmark for 1

0-year government bonds fell 2.5 basis points to 0.43 percent at the beginning of Friday's trade, down from more than two weeks high at around 0.47 percent on Thursday.

Ten-year bond yields over single-currency block, with the exception of Italy, were down 1-3 bps a day.

"The big news is Chinese data," said Pascal Segesser, strategist at DZ Bank.

"There are concerns about trade war and how the decline in China will affect the rest of the world, so it's a typical risk-off move on markets today."

World trade francs, a budget stay between Italy and Brussels and stock market volatility have raised concerns about the prospects for economic growth.

Later on Thursday, European Central Bank chief Mario Draghi said that the ECB's guidelines were not cut in stone, and could change if the outlook became darker.

In contrast, the US federal reserve showed the track to raise prices again in December after its last meeting.

Analysts said Thursday's Fed statement was largely in line with expectations.

After this, interest rate futures funded a 78 percent chance that the US central bank would raise prices at its meeting between 18-19-19 years, a little changed from late Wednesday, CME Group's FedWatch program showed.

"A December increase looks pretty much on this point, and three further tours in 2019 still look like the most likely outcome," ING analysts said in a note.

Weakness in world stocks, with European stocks opening 0.6 percent lower, damaged feel against risky Italian bonds.

Italy's 10-year bond yield increased by 1.5 bp to 3.41 per cent. It's up 10 bps this week, and set its biggest weekly growth for almost a month.

Reporting by Dhara Ranasinghe; Editing Hugh Lawson

Our Standards: Thomson Reuters Trust Principles.

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