Germany’s 10-year government bond yield, the euro area’s benchmark, was flat at 2.71%. It reached 2.697% on Tuesday, its lowest level since November 28 and was around 2.90% early this month. U.S. Treasury yields rose on Thursday, with benchmark 10-year up 1.5 basis points (bps) at 4.32% in early London trade, after edging lower the day before, as risk appetite perked up.
Germany’s 2-year yields, more sensitive to expectations for policy rates, were down one bp at 2.05%.
Money markets kept pricing in an around 30% chance of a European Central Bank rate cut by December.
Italy’s 10-year government bond yields fell 0.5 bps to 3.32%. The gap versus Bunds was at 59.50 bps, after falling to 53.50 bps in mid-January, its lowest level since August 2008.
