Investors Seek Safety Amid Tariff Turmoil

European government bond yields experienced a significant decline on Thursday, as the financial markets reacted to US President Donald Trump's announcement of comprehensive new tariffs. This move has prompted a swift shift towards safer investments.

Market Reactions and Implications

The tariffs, imposing a minimum 10% levy on all imports with even higher rates for certain trading partners, have not only sent equity futures into a steep decline but also raised alarms over the potential for global stagflation.

Yield Movements Across Europe

By 9:20 am CET, the financial landscape showed clear signs of stress. Germany's 10-year Bund yield decreased by 8.4 basis points to 2.641%, with sharper drops observed in shorter maturities. Similarly, France's 10-year OAT yield fell by 6.8 basis points to 3.367%, and the UK's 10-year Gilt yield saw a notable decrease of 10.3 basis points to 4.541%. Italy's 10-year yield also declined, dropping 5.8 basis points to 3.765%.