MILAN, Dec 22 (Reuters) - Euro zone government bond yields fell on Tuesday as concerns about a new strain of the coronavirus and Brexit trade-deal uncertainty dampened risk-appetite.
Countries across the globe shut their borders to Britain on Monday due to fears about a highly infectious new strain of the virus, causing travel chaos and raising the prospect of food shortages days before Britain is set to leave the European Union.
But British Prime Minister Boris Johnson’s government is working with France in an attempt to find a way to lift border closures that have snarled one of Europe’s most important trade routes.
The German 10-year government bond yield was down 1 basis point at -0.59%.
“There is a lot of back and forth in the market...Virus worries continue to weigh while we are still waiting for progress on a possible Brexit deal,” Antoine Bouvet, a senior rates strategist at ING, said.
The Italian 10-year bond yield was down 2.5 basis points at 0.518%.
Equivalent British gilt yields were almost flat after data showed Britain’s economic recovery from its coronavirus crash was a bit quicker than previously thought in the July-September period, while government borrowing soared.
A long-anticipated approval of U.S. stimulus failed to trigger price action as it fell short of hopes that a deal could be as large as $2 trillion.
The U.S. Congress on Monday approved an $892 billion coronavirus aid package, throwing a lifeline to the nation’s pandemic-battered economy after months of inaction, while also keeping the federal government funded.
(Reporting by Stefano Rebaudo; Editing by Kirsten Donovan)