Eurozone Bond Yields Dip Amid U.S. Shutdown Uncertainty
Eurozone bond yields fell as U.S. private sector data indicated a weakening labor market, compounded by uncertainty from the U.S. government shutdown. Bund yields dipped slightly, while French and Italian yields remained stable, with Italy showing fiscal discipline. German bonds saw low demand, stressed by U.S. data challenges.
Eurozone government bond yields slipped on Thursday, reflecting a parallel movement in the U.S. debt market, as data from the private sector hinted at a weakening labor market. The government's shutdown in Washington further fueled uncertainty, leaving significant gaps in employment data analysis for economists and investors.
German 10-year Bunds, a crucial eurozone benchmark, experienced a minor decline, settling at 2.7%. This marks a second consecutive weekly fall, a first since mid-June, amid absent key U.S. labor data due to the shutdown. Commerzbank's Christoph Rieger suggests leveraging Bund dips, highlighting market uncertainty.
While France's bonds saw healthy demand, Germany's recent sale of 10-year Bunds met lukewarm interest. France's higher yields reflect fiscal concerns, contrasting with Italy's promise of fiscal discipline and progress on budgetary goals. Italy's stable yields signal investor confidence as they surpass France's, marking a noteworthy shift in eurozone finance dynamics.
(With inputs from agencies.)
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