German bond bounces back from 2½ week lows

LONDON: German bond yields pulled away from 2½ week lows as world stock markets put aside trade war fears and rallied, taking the shine off safe-haven bond markets.

An escalation in trade tensions between the United States and China, plus dovish rhetoric from the European Central Bank (ECB) that has boosted confidence a rate hike remains some way off, have pushed down bond yields in recent days.

But having hit more than two-week lows, yields on 10-year bonds in the single currency bloc were unlikely to fall much further without a fresh driver, analysts said.

That could come later in the day, given that a number of central bankers are slated to speak at the ECB’s central banking forum in Sintra, Portugal.

Federal Reserve chair Jerome Powell, ECB chief Mario Draghi, Bank of Japan Governor Haruhiko Kuroda and Reserve Bank of Australia Governor Philip Lowe are all scheduled to speak at the conference.

“We have a heavyweight policy panel ... four different banks with four different backgrounds and we’ve already heard from Draghi who has reiterated the need for patience and prudence,” said Commerzbank rates strategist Rainer Guntermann.

“I suspect safe-havens such as Bunds and Treasuries could be put to the test as risk sentiment shows signs of stabilising.” — Reuters