Euro zone bond yield hikes amid US election 2024
Euro zone bond yields edged higher Tuesday as the US election injected mammoth volatility across global bond markets, among other asset classes.
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The benchmark 10-year bond yield in Germany rose almost 2 basis points to 2.41% from last week’s near three-month high of 2.447%.
Euro Zone Bond Markets
Euro zone bond markets will close before voting concludes in Tuesday’s US presidential election, but with potentially sharp swings to come when trading resumes on Wednesday, investors were nervous about making big bets.
Market consensus before election is that a win by former President Donald Trump would cause US Treasury yields to rise given that his policies would drive inflation and growth higher, likely placing a slower place of rate cuts from the Federal Reserve.
However, it is a much more complicated picture in Europe.
Effects of US Elections: Euro zone bond yield hikes amid US election 2024
While euro zone bonds have been generally reacting to the US Treasury market’s lead in the last few months, Trump laying on the heavy tariffs he has threatened on Europe would set the economy back and nudge the European Central Bank to hurry up with their rate cuts, thus bringing yields even lower.
Italy’s 10-year bond yield was 1 basis point higher at 3.68%, while the gap between Italian and German 10-year yields stood at 126 bps.
Euro zone bond yield hikes amid US election 2024
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