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  • May 05, 2017 | Data Points

    Tradeweb Government Bond Update - April 2017

    European government bond yields fell from March to April amid a flurry of political and economic activity, with the largest moves coming from France, Portugal and Greece.

    French voters went to the polls on April 23 to vote for their next President, following a contentious debate over structural changes to the economy. National Front’s Marine Le Pen and Emmanuel Macron of En Marche! advanced to the next round scheduled for May 7. France’s 10-year government bonds ended the month at a mid-yield of 0.77%, a decline of 19 basis points since March 31. 

    At the same time, Portugal’s 10-year bond mid-yields plunged 42 basis points to 3.53%. After years of austerity measures and a bailout from the European Union in 2011, the country’s economic fortunes have seen a revival thanks to 13 consecutive quarters of growth.

    Greek 10-year bond yields fell even more dramatically, dropping 66 basis points to 6.35%, as the government and its creditors finalized details of structural and fiscal reforms to free up funds from the €86 billion bailout program launched in August 2015.

    Elsewhere in Europe, government bond yields saw more modest declines, with those for Germany’s 10-year Bund closing one basis point lower at 0.32%. In the UK, the mid-yield on the 10-year Gilt decreased by five basis points over the course of the month, finishing at 1.08%. Prime Minister Theresa May called for a snap election to be held on June 8, as the country prepares for negotiations to leave the European Union.

    In a surprise move, Sweden’s Riksbank decided to extend its government bond purchases by SEK 15 billion during the second half of 2017, citing uncertainty over political and economic developments abroad. Swedish 10-year government bond mid-yields ended the month at 0.57%, having climbed as high as 0.65% on April 26.

    Meanwhile, the mid-yield on the US 10-year Treasury dropped 11 basis points to 2.28%, as speculation around healthcare and tax reform legislation continued to dominate headlines. In Japan, its JGB counterpart also fell during April to close four basis points lower at 0.02%.

    Ten-year benchmark government bond data_ April 2017_Tradeweb

     

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