European bond investors gravitated toward the safest assets on Friday as political and economic developments pointed to a muddier outlook for the continent.
German bonds led gains among core euro-region securities after French Socialist Party presidential candidate Benoit Hamon said he’s in talks with far-left candidate Jean-Luc Melenchon about a potential single candidacy. That boosts the chance that the anti-euro Marine Le Pen may not face a centrist candidate in the final round of voting in May. Austrian and Dutch securities also advanced.
Italy’s bonds declined as former premier Matteo Renzi faced an uphill battle to avert a deepening split in his ruling Democratic Party, and in the U.K., 10-year gilt yields touched the lowest level since November after data showed retail sales fell for a third month, spurring bets the Bank of England will need to support the economy for longer.
Safest asset is often Gold.
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