European Government Bonds Experience Minor Declines

Deep News04-10

European government bonds edged lower on Friday, with UK gilts showing the most pronounced drop. Restricted passage through the Strait of Hormuz continues to drive energy prices higher. The yield on the UK 10-year government bond rose by 0.04 percentage points to 4.79%, while the interest rate-sensitive 2-year bond yield also increased by 0.04 percentage points to 4.38%. Italy's 2-year government bond yield climbed by 0.03 percentage points to 2.75%, whereas the yield on German government bonds of the same maturity remained unchanged. Barclays interest rate strategists noted on Friday that although news of a two-week ceasefire provided some relief to the market, a continued decline in oil prices remains a necessary condition for the market to further unwind expectations of interest rate hikes.

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