Eurozone bond yields are falling from six-week highs amid a flight to safe assets

Euro zone bond yields fell from a six-week high on Friday as sentiment turned and investors sold risky assets and bought back bonds.After rallying on this week’s upbeat results from AI supplier Nvidia, stocks in Europe posted steep losses on Friday as concerns about high technology valuations and a more hawkish Fed contributed to a risk-averse mood.

Among euro-denominated assets, investors often turn to German bonds when global risk sentiment deteriorates, given the country’s very low default risk and high bond market liquidity.
Bond yields move inversely with prices.

The German 10-year yield, the benchmark for the eurozone, fell 3 basis points (bps) to 2.69%, reaching a six-week high of 2.741% on Thursday.

Yields on Italian 10-year government bonds fell 1.6 basis points to 3.45%, after also reaching a six-week high on Thursday. “Nvidia’s results did not change the facts about AI valuations. The mood boost it provided proved temporary,” said Neil Wilson, UK Investor Strategist at Saxo Markets. in a shrinking area, as a private study showed.The 20-nation bloc has shown economic resilience since the start of the year despite high global uncertainty, confirming expectations that the European Central Bank will most likely maintain interest rates next year.

In the US, brokers are divided on whether the Fed will cut or maintain interest rates in December, after conflicting signals on job growth and unemployment earlier this week.

Concerns about the stability of financial markets, including the potential for a sharp decline in asset prices, are emerging as a new theme for Fed officials as they debate when to cut rates further.

Short-term interest rates, which are more sensitive to changes in interest rate policy, also fell on Friday.

German two-year yields fell 2.8 basis points to 1.99% after briefly hitting a two-week low