Premarket: Positive German data temper recession fears, lifts bond yields GlobeInvestor
World stocks hit a 12-day trough on Monday as fears for economic growth sent investors dashing for safe-haven assets, but the selloff lost some momentum after better-than-expected data from Germany.
“Many people may have realized a major part of their expected returns for the year, so in light of recent gains it makes sense for investors to should lighten up on risk.” The German data also helped Germany’s benchmark 10-year bond yield move back into positive territory.Spreads between U.S. three-month and 10-year Treasury yields turned positive. U.S. 10-year treasury yields stood at 2.7240 per cent after yields inverted for the first time since 2007 on Friday. Historically, an inverted yield curve - where long-term rates fall below short-term - has signaled an upcoming recession.
Political turmoil in Britain over the country’s exit from the European Union also remains a drag on risk assets.Prime Minister Theresa May held crisis talks with senior colleagues and hardline Brexiteers on Sunday trying to breathe life into her twice-defeated European divorce deal after reports her cabinet was plotting to topple her.
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