Euro Zone Bond Yields Dip Amid Soft U.S. Economic Data

Euro zone government bond yields fell once again on Friday, reversing from multi-week highs earlier in the week. This decline was spurred by lackluster U.S. economic data and a decrease in risk appetite after progress in the Sino-U.S. trade negotiations waned.

Significantly, German 10-year bond yields, which set the pace for the euro zone, dipped by 4.6 basis points down to 2.579%. Despite this fall, they still appeared poised for a fourth week of increases as investors moved away from debt securities.

Meanwhile, the U.S. finalized trade agreements with Britain and China, alleviating recession fears tied to the trade war and reducing demand for safe havens. However, soft data emerging on Thursday signaled a slowdown in the U.S. economy, leading to heightened expectations for interest rate cuts from the Federal Reserve, influencing a drop in U.S. 10-year Treasury yields.

(With inputs from agencies.)