UPDATE 1-German government yield falls amid uncertain coronavirus impact

The safe-haven German government bond yield was down slightly on Wednesday as investors remained unsure of the impact China's coronavirus will have on global economic growth and future borrowing costs. China reported 1,749 new confirmed cases of coronavirus infections, the lowest daily rise since Jan. 29, as the death toll passed 2,000.

Investors are concerned about how the outbreak will impact supply chains in the world's second-biggest economy and what effect it will have on inflation and monetary policies. "We hear from our clients that they are not buying right now because they are waiting for a better pick up in yield," said Rene Albrecht, a rates strategist at DZ Bank in Frankfurt. "Everyone in the market is looking for direction."

Germany's 10-year benchmark yield was down 1.2 basis points at -0.42%, near to Tuesday's two-week low of -0.43%. The rest of the eurozone market followed suit. Earlier in the day, the German yield traded slightly higher, before bond prices started rising again.

The safe-haven German government bond yield had drifter away as pressure from China's coronavirus outbreak seemed to ease somewhat due to a slowdown in the number of new infections and promises of further economic stimulus measures by Beijing. Chinese policymakers have implemented a raft of measures to support an economy sharply affected by the outbreak, which is expected to erode first-quarter growth. Europe relies heavily on Chinese economic growth.

Firms in China's virus epicenter of Hubei province will not have to pay pensions and benefits until June. A Bloomberg report said China is mulling cash injections or mergers to bail out airlines. Germany's finance minister and his counterparts in the bloc have said they would be ready to spend more if a downturn hits its economy.

Rates in Europe took guidance from comments coming from the Unites States policymakers, including Dallas Federal Reserve Bank President Robert Kaplan who on Tuesday repeated his view that the current setting of U.S. interest rates is "roughly appropriate" through the end of this year, even as he noted risks from the flu-like epidemic that has brought parts of China to a halt.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)