LONDON, Nov 2 (Reuters) – Two-year government bond yields in the euro zone fell to their lowest in around two months on Thursday, and longer dated yields also dropped after a sharp fall in U.S. Treasury yields as markets took a dovish message from a Federal Reserve meeting.
Germany’s two-year yield dropped to as low as 3.01% in early trading, down around 3 basis points to its lowest since Sept 5.
Italy’s two-year yield touched 3.749%, its lowest in almost two months.
The Federal Reserve on Wednesday left policy rates steady and acknowledged that recent increase in yields has had a tightening impact on financial conditions, underscoring market expectations the U.S. central bank is at the end of its monetary tightening campaign.
That caused sharp moves lower in U.S. Treasury yields, with the two year Treasury yield dropping as low as 4.925% on Thursday, its lowest in over three weeks, and a whisker off its lowest in two months.
Germany’s 10-year bond yields on Thursday meanwhile fell to a three week low of 2.71%. (Reporting by Alun John; editing by Dhara Ranasinghe)
Read More: Euro zone two-year bond yields at lowest in two months on dovish Fed