November 8, 2017 / 1:29 PM / in a year

German bond curve flattens more as longer-maturity yields drop

LONDON, Nov 8 (Reuters) - German bond yields extended their decline on Wednesday, led by falling yields on longer-maturity debt as a global trend of flattening yield curves gathered momentum.

Yields on ten-year German government debt dropped by two basis points to 0.31 percent.

As a result, the spread between the yield of two- and 10-year maturities tightened to their narrowest since early-July at 108 basis points.

While the global economy is enjoying a rare spot of strong growth in three of the world’s biggest economic engines - the United States, Europe and China - the flattening curve suggests investors have doubts over the future path of inflation and may even be starting to price in the next slowdown.

Reporting by Saikat Chatterjee; editing by Sujata Rao

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