PARIS: UK bond yields hit an all-time low on Monday while rates on German debt pushed further into negative territory as investors sought safe haven following a vote to leave the EU.
“Markets are in unknown terrain, creating exaggerated reactions,” analysts at BNP Paribas wrote as UK 10-year bond yields fell to 0.963 per cent and their German equivalents stood at -0.099pc.
British finance minister George Osborne sought to reassure markets in a statement early on Monday, saying that the UK economy was “as strong as could be”.
Leading Brexit campaigner Boris Johnson insisted that “the negative consequences are being wildly overdone” in a Monday column for the Telegraph newspaper.
He added that markets and the currency were “stable” in comments to journalists outside his London home.
But with the pound hitting its lowest point against the dollar in more than 30 years and stocks in British banks, airlines and property firms plunging, investors have sought out the perceived security of government bonds across Europe.
Yields on French, Italian and Spanish 10-year-bonds also fell, although none was in such high demand as German debt.
Markets are keenly awaiting any sign from European leaders on the next stages in the Brexit drama. The UK has yet to submit formal notification of its intent to leave and European partners cannot force it out until it does so.
German Chancellor Angela Merkel rejected calls from France and the bosses of the European Commission and European Parliament for Britain to go quickly over the weekend.
Courtesy : Dawn News