German bond yields hit 2-1/2 month low after dismal GDP data
Safe-haven German government bond yields hit new 2-1/2 month lows on Thursday as the country’s economy showed a worse-than-expected, record contraction in the second quarter. Investors are focusing on economic data after the U.S. Federal Reserve left interest rates near zero on Wednesday. Weak readings hit riskier assets like stocks with fears of a potential second wave of coronavirus infections which could put Western economies back in lockdown. “Data is increasingly important now that the market has now come to terms with a second wave,” Mizuho analysts told clients.
The German economy contracted by 10.1% in the second quarter in its steepest plunge on record, worse than the 9% contraction predicted by Reuters economists and wiping out nearly 10 years of economic growth.
“The drop was even harsher, more pronounced than expected, which is something that is also being reflected by the market,” said DZ Bank strategist Daniel Lenz. “There has been a lot of optimism in the spring with corona numbers going down and some early indicators going up. Now, with this very weak reading of German GDP numbers…(there is an) expectation that maybe some of the other European readings will be even worse,” he said, referring to the likes of Italy and Spain.
Germany’s 10-year yield fell to a new 2-1/2 month low of -0.55%, dropping further below the -0.50% level where it had found support in recent weeks. Yields were last down 5 basis points at -0.54%.
Yields were also pushed down by data showing German annual inflation came to a standstill in July. On top of that, U.S. President Donald Trump on Thursday raised the possibility of delaying the nation’s Nov. 3 presidential election.
Political turbulence usually lends supports to low risk assets. Lenz added that the increase in coronavirus infections and uncertainty around the agreement of a new stimulus plan in the U.S. were also supporting safe-haven bonds.
He said 10-year yields could fall to near -0.60%, a level last touched at the height of coronavirus market panic in mid-March, unless concerns eased. Elsewhere, Italian 10-year yields fell to their lowest since early March at 1.036%, as the country sold five and ten-year bonds via auction.
They were last down 2.5 bps at 1.03%.
https://www.reuters.com/article/eurozone-bonds/update-2-german-bond-yields-hit-2-1-2-month-low-after-dismal-gdp-data-idUSL5N2F13F7
spouse just did same thing-no mask and no problems.
SoCal-Stater Bros
Later in the day is when the karens come out
chek't
VALOR21 USAF Learjet departed Boso AB, Norway and did some low passes at Aalborg Airport, Denmark on the leg south to Ramstein AFB
Belgian AF BAF607 departed Toulouse, France north to Brussels Airport with BAF87 Falcon 7X departed same and heading to Cagliari, Sicily
German AF GAF893 Airbus A319 departed Erfurt-Weimar Airport south and descending for Memmingen, Germany-west of Munich
RCAF CFC4037 C-17 Globemaster from Panama Pacifico Airport to Guatemala City and lining up for landing after a fly over of Airport
0000000 (Usually a MAGMA call) from Homestead ARB, FL heading to Comayagua, Honduras (a semi-regular stop for these and a few C-130's in the last few months)
the shorter list, now, is what they are not buying.
The currency swaps will get bigger and bigger too.