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Eurozone Bond Yields Add on Brexit Deal Gleam

On Monday eurozone bond yields advanced as traders sold risk-off assets on the retreating threat of a British no-deal withdrawal from the EU and in the conviction that the UK parliament could yet affirm a Brexit understanding.

ecbPhoto: Flickr

Perky mood over Brexit arrangements — a week ago the EU and Britain concurred another arrangement — has fuelled a selloff in eurozone bond markets. Traders feel that some kind of goals to the Brexit vulnerability would support the eurozone economy, just like the British.

The deferral of a crunch vote on the divorce deal in the British parliament at the end of the week has done little to turn around that hopefulness, as the government was constrained by parliament to keep in touch with the EU to request a postponement to Britain withdrawing the bloc.

The benchmark 10-year German government bond yield gained 3 bps to minus 0.356 percent, while other key eurozone yields were likewise higher.

English government bond yields likewise advanced on Monday.

Peripheral bonds in Italy, Portugal, and Spain were likewise higher by 2 to 3 basis points.

Experts said Brexit would remain the prevailing driver for eurozone bond markets until financial numbers discharged later during the week, including flash PMI overviews.

Traders are also getting ready for ECB President Mario Draghi's last approach meeting on Thursday. While no noteworthy strategy switches are anticipated, market focus will be turned to a feeling of how profound is a break among policymakers over restored asset buys.

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