AGL 40.00 Decreased By ▼ -0.16 (-0.4%)
AIRLINK 129.53 Decreased By ▼ -2.20 (-1.67%)
BOP 6.68 Decreased By ▼ -0.01 (-0.15%)
CNERGY 4.63 Increased By ▲ 0.16 (3.58%)
DCL 8.94 Increased By ▲ 0.12 (1.36%)
DFML 41.69 Increased By ▲ 1.08 (2.66%)
DGKC 83.77 Decreased By ▼ -0.31 (-0.37%)
FCCL 32.77 Increased By ▲ 0.43 (1.33%)
FFBL 75.47 Increased By ▲ 6.86 (10%)
FFL 11.47 Increased By ▲ 0.12 (1.06%)
HUBC 110.55 Decreased By ▼ -1.21 (-1.08%)
HUMNL 14.56 Increased By ▲ 0.25 (1.75%)
KEL 5.39 Increased By ▲ 0.17 (3.26%)
KOSM 8.40 Decreased By ▼ -0.58 (-6.46%)
MLCF 39.79 Increased By ▲ 0.36 (0.91%)
NBP 60.29 No Change ▼ 0.00 (0%)
OGDC 199.66 Increased By ▲ 4.72 (2.42%)
PAEL 26.65 Decreased By ▼ -0.04 (-0.15%)
PIBTL 7.66 Increased By ▲ 0.18 (2.41%)
PPL 157.92 Increased By ▲ 2.15 (1.38%)
PRL 26.73 Increased By ▲ 0.05 (0.19%)
PTC 18.46 Increased By ▲ 0.16 (0.87%)
SEARL 82.44 Decreased By ▼ -0.58 (-0.7%)
TELE 8.31 Increased By ▲ 0.08 (0.97%)
TOMCL 34.51 Decreased By ▼ -0.04 (-0.12%)
TPLP 9.06 Increased By ▲ 0.25 (2.84%)
TREET 17.47 Increased By ▲ 0.77 (4.61%)
TRG 61.32 Decreased By ▼ -1.13 (-1.81%)
UNITY 27.43 Decreased By ▼ -0.01 (-0.04%)
WTL 1.38 Increased By ▲ 0.10 (7.81%)
BR100 10,407 Increased By 220 (2.16%)
BR30 31,713 Increased By 377.1 (1.2%)
KSE100 97,328 Increased By 1781.9 (1.86%)
KSE30 30,192 Increased By 614.4 (2.08%)

Eurozone government bond yields dipped on Monday as an unexpected fall in German industrial orders served as a reminder that a softening in economic data will encourage the European Central Bank to prolong an unwinding of stimulus. The biggest yield falls came in Italy after the leader of Italy's far-right League, Matteo Salvini, raised the possibility that his electoral ally Silvio Berlusconi could "step aside" to allow a government to be formed after two months of deadlock.
Broader bond markets, while subdued by a holiday in London, were supported by the latest signs of weakness in the euro zone economy. Ten-year bond yields were down 1-3 basis points on the day.
German industrial orders unexpectedly dropped for the third month running in March due to weak foreign demand, data showed. A growing perception that a rise in interest rates will come later than anticipated due to slowing growth momentum and subdued inflation has underpinned euro zone bond markets although a jump in oil prices could limit further falls.
"Bonds are a bit firmer on the back of the softer German data," said Commerzbank rates strategist Rainer Guntermann. "A lot has been repriced in terms of the ECB so the outlook for bonds is a bit more mixed." US oil prices rose above $70 a barrel on Monday for the first time since November 2014 on a deepening economic and social crisis in Venezuela and a looming decision on whether the United States will re-impose sanctions on Iran.
Still, Germany's 10-year bond yield dipped two bps to 0.52 percent, an almost three-week low. Italy's 10-year bond yield fell three bps to 1.76 percent, extending falls after Salvini's comments.
Earlier on Monday Salvini said he had asked Italy's president to give him a mandate to try to form a government to end the deadlock. 5-Star says it is ready to form a government with the League but will not enter a coalition that includes Berlusconi. So far Salvini has refused to abandon his old ally and Berlusconi has rejected any suggestion that he should withdraw.
The Italian/German 10-year bond yield gap narrowed to 123 bps. On Friday it hit 126 bps, the widest in over two weeks. "Italian BTP/Bund spreads will be further put to the test by last ditch efforts in Italy to hammer out a government coalition," said Benjamin Schroeder.

Copyright Reuters, 2018

Comments

Comments are closed.