Bonds News

German yields fall for second day as selloff in bond markets subsides

* Euro zone periphery govt bond yields

LONDON, March 1 (Reuters) - Benchmark German government dropped for a second consecutive day on Monday as investor sentiment improved after reflationary bets sent bond markets for their biggest monthly selloff in years.

The rise in bond yields last month, spurred on by U.S. fiscal stimulus hopes and a post-pandemic economic rebound that could fuel inflation, reverberated around the world.

Investors said the surprising selloff resembled the “taper tantrum” of 2013, when hints that the U.S. Federal Reserve might slow its money printing triggered an exodus from bonds.

Policymakers moved to dispel concern that they might tighten policy soon. Australia is widely expected to adopt a cautious stance at Tuesday’s policy meeting and European Central Bank executives warned against withdrawing policy support too early in the economic recovery. Consequently, yields fell broadly.

Yields on ten-year U.S. Treasury yields fell five basis points to 1.40% on Monday. On Thursday, it touched 1.614%, the highest in a year, rocking world markets.

“We will probably see stabilizing sovereign yields this week, which should give investors a sigh of relief after the past week’s tumultuous market environment,” said Ipek Ozkardeskaya, a senior analyst at Swissquote.

German government bond yields also retreated. Yields on 10-year securities fell to -0.30%.

Monday’s drop comes after Germany’s 10-year yields , the region’s benchmark, notched their biggest monthly rise since January 2018 with a 26-basis-point rise.

Ten-year Southern European government bond yields, which have also risen rapidly also retreated, falling 5 to 10 bps across the curve. (Reporting by Saikat Chatterjee; editing by Larry King)