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European stocks decline, while bond prices surge

FXStreet (Mumbai) - The European stock markets fell today as the bond prices rallied pushing the ten-year bond yields across the Eurozone to record lows.

The Dax has erased its early gains to trade 0.80% lower at 8754, while the Cac is trading lower by 0.77% at 4056. The Euro Stoxx 50 has lost more than 1% till now. Most of the periphery nation equity markets have also weakened by 0.5% each. Meanwhile, the Ftse has declined by 1.1% to trade at 6321 levels despite of an upbeat UK employment report.

Moreover, the slump in Crude prices has added to the existing threat of deflation and low growth in the Eurozone. Consequently, the demand for the fixed-income assets has increased. French yields dropped to a record low even after the French debt was placed on negative watch by Fitch Ratings yesterday.

The German ten-year yield has dropped two basis points to 0.817%, while the French ten-year yield has declined by almost 4 basis points to 1.163%. Meanwhile, the ten-year yields in the UK are down as markets priced-in a delay in the interest rate hike. The 10-year gilt yield is down three basis points to 2.10%.

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