Euro zone bond yields dip as tech jitters send traders to safety

Euro zone bond yields ​dipped alongside those of Treasuries on ​Tuesday, particularly yields of longer-dated ‌bonds, as ​a selloff in tech stocks drove some slight flows to the safety of government debt. Germany's ‌10-year bond yield, the benchmark for the euro zone, dropped 5 basis points to 3.43%, outpacing a 3 bps fall in its 2-year yield, last at ‌3.09%.

Turmoil in bond markets has eased somewhat in the past ‌few sessions, but bonds remain fragile after the selloff in late September and early October, which pushed Germany's 10-year yield to 3.65%, its highest since 2009. Helping drive some flows into ⁠bonds ​on Tuesday, in ⁠a typical safe-haven move, were renewed jitters in tech stocks. South Korea's tech-heavy KOSPI tumbled ⁠over 5%, while Nasdaq 100 futures shed 0.7%.

The rally in bonds was across ​markets. The benchmark 10-year Treasury yield fell 6 bps to 5.18%, while ⁠in Europe France's 10-year yield fell 5 bps to 4.85% and Italy's dropped 3 ⁠bps ​to 4.55%. French government bonds have been at the centre of the recent bond market storm, with investors concerned that the political jostling ahead of ⁠next year's presidential election may hinder the government's efforts to reduce its high ⁠deficit.

The spread ⁠between French and German debt, a gauge of the premium investors require to lend to France rather than Germany, was ‌last ‌140 bps.