Economist's Insights

Global Sovereign Yields Fall as Prospects for Healthcare Reform Dim, ECB Sends Mixed Policy Signals

Jul 21, 2017

Longer global sovereign yields moved lower for the week ended July 21 on a mix of inflation data, central bank decisions, and more uncertainty about the U.S. fiscal and political landscape. The beginning of the second round of Brexit negotiations started yields southward. An apparent failure by the U.S. Senate to agree on a single plan for reforming the Affordable Care Act added to the downward pressure on yields. The pressure eased midweek and yields rose for just the second time in eight days. A dovishly slanted decision from the ECB on Thursday resumed the bid for sovereign debt and a mid-morning report about the broadening of the Russian investigation added to the uncertain scene in Washington. Friday’s session was quiet and left yields to finish out the week in a continuation of the weekly drift lower. At Friday’s close, the spread between 2s and 10s had reached its tightest level since June 28. Click here for the visual.