Euro Zone Bond Yields Hit Record Low Amid Global Trade Tensions

Euro zone government bond yields have seen their largest weekly drop since last November, as investors shift towards safer assets due to fears of a global economic downturn sparked by U.S. tariffs. Notable declines were observed in German, Italian, and French 10-year bond yields.

Euro zone government bond yields are experiencing their largest weekly drop since last November, as investors flock to safer assets amidst escalating fears of a global economic downturn. This market movement is primarily driven by far-reaching U.S. tariffs that are darkening the global economic outlook and stoking recession fears.

Investors' pursuit of safer options has prompted a sell-off in stocks, leading to declines in 10-year bond yields across Germany, Italy, and France. Germany's 10-year bond yield, a euro zone benchmark, fell 4.4 basis points to 2.597%, marking a 15 basis point weekly decline not seen since November last year.

This downward trend is reflective of the broader market sentiment, with Germany's two-year bond yield also dropping to its lowest since December. Markets are now factoring in a significant likelihood of a European Central Bank rate cut in April, as ongoing trade disputes are anticipated to further impact global economies.

(With inputs from agencies.)