LONDON May 17 The gap between U.S. and German
government borrowing costs fell to its lowest level in over six
months on Tuesday after a week of tumult at the White House
contrasted with signs of stronger integration and growth in
Reports that Donald Trump tried to interfere with a federal
investigation and discussed sensitive security information with
Russia has sowed investor fears that he may be distracted from
pushing through his economic stimulus programme.
This has even dented firm expectations that the U.S. Federal
Reserve will raise interest rates next month. Meanwhile,
improving data and ebbing political worries in Europe appear to
be supporting calls for tighter monetary policy later this year.
U.S. 10-year yields dropped as much as 4 basis points on
Wednesday to 2.29 percent while German equivalents
were 2 bps lower at 0.41 percent. At 188 bps, the
gap between the two benchmarks was the lowest since November.
(Reporting by John Geddie; Editing by Jamie McGeever)