German Bund hits record poor yields

German Bund hits record poor yields

Yields on the 10-year German Bund last week reached a low not seen in nearly 40 years.

Bad news out of the United States showing inflation up and consumption and employment up only slightly, and that the U.S. economy in general had not grown as much as expected in the first quarter provided the impetus to push below the 3.4 percent mark on Wednesday.

On Friday the yields reach a low of 3.377 percent. The fall in yields were all the more notable because it was expected that eurozone yields would see a rise this year.

Besides the effect of bad economic news out of the United States, news out of the eurozone itself helped yields lower as well Friday, the German government cut its estimate for growth in 2005 in view of reports of falling business and consumer confidence.

Business confidence in Italy and France were reported lower in April, as well, and the European Commission on Thursday said that economic sentiment in the eurozone fell to 96.5 in April, the lowest since August since 2003 and down from 97.5 in March.

This indicated that growth in the second quarter might slow further.

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