DAX Continues to Decrease
European stock indices are trading lower today. The German DAX stock index fell by 0.37% to trade at 11.917 level. Yesterday, the DAX dropped as much as 1.5%, but managed to recover most of these losses. European stocks remain pressured by rising US bond yields. On Tuesday, the yield on 10-year treasury notes reached 3.26%, the highest yield since 2011. Meanwhile, 30-year treasury bonds climbed to a 4-year high of 3.44%.
Eurozone bond yields have also risen. Today, German 10-year bonds touched their highest level since May. Italy’s 10-year yield was down three basis points at 3.50%. The closely-watched Italy/Germany 10-year bond yield spread was tighter by four basis points on the day at around 295 bps.
The German government has cut its forecasts for economic growth for 2018 and 2019 in Europe's largest economy amid escalation of the global trade war. The government reduced its 2018 and 2019 growth forecasts to 1.8%, compared with its previous predictions of 2.3% and 2.1% respectively.