Investors Rush to Safety as Trump's Tariff Policy Shakes Markets

European government bond yields experienced a significant drop on Thursday, as investors sought refuge in safe-haven assets following the announcement of US President Donald Trump's new comprehensive tariff policy. This move has sparked widespread concern over the potential for global stagflation.

Market Reactions Across Europe

The impact was felt across Europe's financial markets, with Germany's 10-year Bund yield decreasing by 8.4 basis points to 2.641%. France and the UK also saw their 10-year yields fall by 6.8 and 10.3 basis points to 3.367% and 4.541% respectively, while Italy's 10-year yield dropped by 5.8 basis points to 3.765%.

The tariffs, which include a minimum 10% levy on all imports and even higher rates for certain trading partners, have led to a sharp decline in equity futures, further fueling fears among investors.