Euro Zone Bonds: A Safe Haven Despite Tariff Tensions

Euro zone government bond yields fell as investors turned back to safer assets amid global market uncertainties. Germany's 10-year bond yield dropped after a surge influenced by US-China tariff speculations. Despite a rise in German business morale, concerns about tariffs and economic growth persist.

Euro zone government bond yields experienced a decline on Thursday, following a notable increase the previous session, as investors sought refuge amidst global market volatility.

Germany's 10-year bond yield, usually a benchmark for the euro zone, fell by 3 basis points to 2.47%, in contrast to its 5.5 basis points rise on Wednesday triggered by speculation over U.S. tariff cuts on Chinese imports, which drove investors away from safer assets.

The Ifo survey reported an unexpected rise in German business morale albeit amid heightened corporate uncertainty. Meanwhile, discussions on the easing of U.S.-China tariff tensions brought cautious optimism, as significant obstacles remain on this front.

(With inputs from agencies.)