Global Bonds Rally as Euro-Area Data Add to Fears of a Slowdown

© Reuters. Global Bonds Rally as Euro-Area Data Add to Fears of a Slowdown

(Bloomberg) — European bonds kicked off 2019 with a bang as poor manufacturing data sparked global growth concerns, rekindling demand for the safety of government debt.

Gilts led gains across the continent and yields on 10-year German notes fell to the lowest since April 2017. That came as a Spanish purchasing manufacturing index for December fell below expectations and other European releases failed to bolster investor confidence after data from China posted the lowest reading in 18 months.

“With equities opening sharply lower, a risk-off tone in European government bonds quickly took hold,” said Martin van Vliet, senior interest-rate strategist at ING Groep (AS:) NV.

Yields on 10-year German bonds dropped six basis points to 0.18 percent, while those on gilts fell seven basis points to 1.21 percent. Equivalent Treasury yields declined two basis points to 2.66 percent.

Vliet said it’s too early to know if this signals a trend toward even lower core yields in early 2019 given a wave of planned bond selling by European governments in coming weeks. Spain, Germany and the U.K. are set to issue debt in the next week.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.