The U.S. Treasury yield curve flattened on Thursday as the European Central Bank committed to leaving interest rates steady into the first half of 2020, while major world stock indexes were mixed following U.S. President Donald Trump’s fresh tariff threat against China.
The ECB’s move was less aggressive than what some traders had expected and led to selling in shorter-dated German government debt, which in turn spilled over into shorter U.S. Treasury maturities, traders and analysts said.
Much of the yield curve flattened, coming off its steepest level in seven months the previous day. The gap between two-year and 10-year yields narrowed by 2.6 basis points to 25.10 basis points.
German 10-year yields tumbled to a record low of -0.240% before retracing to -0.220%. Benchmark 10-year notes last rose 6/32 in price to yield 2.1036%, from 2.123% late on Wednesday.
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