Euro zone government bond yield hits 2-1/2-month low on US-China trade tensions

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Euro zone government bond yields hit fresh multi-week lows on Tuesday, as concerns over U.S.-China trade tensions overshadowed France’s ongoing political stalemate.

Investors fretted over the potential economic fallout from uncertainty following trade disputes, which could cloud corporate decision-making and delay investment planning.

However, U.S. President Donald Trump remained on track to meet Chinese leader Xi Jinping in South Korea in late October as both sides looked to ease tensions following fresh tariff threats and export controls.
French Prime Minister Sebastien Lecornu faces two possible no-confidence votes, and it was unclear if he had the votes to survive to the end of the week.

Germany’s 10-year Bund yields, the bloc’s benchmark, fell 3 basis points (bps) to 2.60%, after hitting 2.588%, the lowest since July 23.


German investor morale rose less than expected in October, the ZEW economic research institute

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