* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr
By Yoruk Bahceli
LONDON, Dec 17 (Reuters) - Euro zone bond yields fell on Tuesday as the UK signalled willingness to accept a Brexit cliff-edge to push the European Union to agree a free trade deal and a final agreement had yet to emerge on the first phase of a U.S.-China trade deal.
British Prime Minister Boris Johnson said he will use his control of parliament to outlaw any extension to the transition period following the country’s expected exit from the European Union on Jan. 31 following a general election last week.
The implied uncertainty ahead may have be providing some support for safe-haven government bonds, said DZ Bank rates strategist Andy Cossor, although he added that the cut-off at the end of 2020 is a long way away.
Most 10-year euro zone bond yields were around two basis points lower in early trade , with Germany’s 10-year yield at -0.30%, far off a six-month high of -0.217%.
Meanwhile, the so-called phase one trade deal between Washington and Beijing has been “absolutely completed,” a top White House adviser said on Monday, adding that U.S. exports to China will double under the agreement.
Under the trade agreement announced last week, Washington will reduce some tariffs on Chinese imports in exchange for Chinese purchases of agricultural, manufactured and energy products increasing by about $200 billion over the next two years.
A date is being determined for the deal to be signed, said U.S. trade representative Robert Lighthizer. Several Chinese officials told Reuters the wording of the agreement remained a delicate issue and care was needed to ensure expressions used in the text did not re-escalate tensions.
“Sometimes the devil is in the details so they may have framework agreement but nailing down the last few details can be trickier than market participants expect,” said DZ Bank’s Cossor.
It is a light calendar for euro zone data releases ahead of Wednesday’s well-watched German business sentiment Ifo survey, but U.S. industrial production data and housing starts numbers due later in the session will be watched.
Reporting by Yoruk Bahceli; editing by Philippa Fletcher