German bond yields fell to new lows on Thursday and U.S. treasury yields resumed their fall as renewed trade tensions doused a rally fueled by hopes for more central bank stimulus ahead of a European Central Bank meeting.
Sentiment had soured on a lack of progress in talks between U.S. and Mexican officials and President Donald Trump issuing a fresh threat to hit China with tariffs on “at least” another $300 billion worth of Chinese goods.
The latest flare up in tensions follows a mixed bag of economic data that rekindled woes over the health of the world’s top economies but also spurred expectations that central banks could ride to the rescue.
While MSCI’s broadest index of Asia-Pacific shares outside Japan and the Nikkei eased a touch, the pan-European STOXX 600 rose 0.6%, with Germany’s DAX up 0.7% while France’s CAC gained 0.6%.
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