40-year low on German Bund yeilds
Bad economic news out of both the eurozone and the United States last week sent the yields on 10-year German Bund to the lowest level in nearly 4 decades.
Business confidence in Italy and France were reported to be lower in April. The European Commission on Thursday said that economic sentiment in the eurozone fell to 96.5 in April, the lowest since August since 2003 and down from 97.5 in March, indicating slower growth in the second quarter.
And on Friday, the German government announced that it was lowering its estimate for growth in 2005 due to reports of falling business and consumer confidence. Additionally, news from the United States showed that inflation was up while consumption and employment rose only slightly in the first quarter, and that the U.S. economy in general had not grown as much as expected in that period.
All of this combined to send 10-year German Bund yields below the 3.4 percent mark on Wednesday, while on Friday they reached a low of 3.377 percent. This fall in yields were all the more notable in light of expected gains in eurozone yields this year.
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