LONDON (Reuters) – Germany’s 10-year bond yield dived below zero percent on Friday for the first time since October 2016, as a survey showing German manufacturing contracted for a third straight month fueled fears about a widespread European slowdown.
Those concerns were exacerbated when the U.S. manufacturing sector flash Purchasing Managers’ Index (PMI) came in below estimates, triggering an inversion of the U.S. bond yield curve for the first time since 2007.
Session - Moves - Bond - Markets - Germany
In a session of eye-popping moves across major bond markets, Germany’s 10-year bond yield slid over 6 basis points to minus 0.032 percent, its lowest since October 2016.
French and Dutch long-dated bond yields hit their lowest since 2016, British gilt yields fell to their lowest since September 2017 and the 10-year U.S. Treasury yields slid 10 bps to 14-month lows.
Signs - Stabilization - Numbers - Data - Today
“We had tentative signs of a stabilization in the economic numbers and then the data came out today and it suggested there is no stabilization,” said Peter Schaffrik, global macro strategist at RBC Capital Markets in London.
IHS Markit’s flash composite Purchasing Managers’ Index measuring activity in German services and manufacturing, which together account for more than two-thirds of the economy, fell to 51.5 in March, its lowest reading since June 2013.
Zone - PMI - Businesses - Currency - Bloc
The broader euro zone PMI meanwhile showed that businesses across the 19-country currency bloc have performed much worse than expected this month.
“The narrative behind it isn’t a big surprise … But the size of the surprise is fairly material. These things happen very rarely, and the surprise is what matters the most for market activity,” said Antoine Bouvet,...
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