Eurozone Bond Yields Fall

An undercurrent of political and policy risks pushed down eurozone government bond yields on Friday, discouraging investors from putting too much faith in improved economic data, Reuters reported. Despite a market-friendly result in the French presidential election and strong recent inflation and private sector activity numbers from the bloc, most eurozone bond yields are well below recent highs. Germany’s 10-year government bond yield, the benchmark for the region, fell 3 basis point to a one-week low of 0.33%—comfortably above the 0.2% level at the start of the year but well below the 0.51% March high. Investors took their cue from policymakers staying cautious on the brightening political and economic picture in Europe and its implications for monetary policy. “We have had a few positive political outcomes, but we still have Brexit negotiations to come, Italian and German elections, a potential Catalonia (independence) referendum and the unpredictable factor of Donald Trump’s presidency,” ING strategist Padhraic Garvey said.