Italian and Greek government bonds – the riskier assets in the eurozone government bond market – strongly outperformed their peers on Monday, brushing aside waning risk appetite across global markets.
The outperformance gave Greek 10-year bonds their best day since September and Italian 10-year bonds enjoyed their best in three weeks.
This followed a Southern European debt sell-off in November, when investors sought to lock in stellar profits from these markets ahead of year-end, when volumes tend to thin.
Monday’s moves came as global equity markets were down marginally after Chinese export data highlighted the economic damage from the 17-month-long trade war with the United States and refocused attention on a crucial December 15 tariff deadline.
Bonds from Italy and Greece would usually not be expected to underperform on days where investors shun risk assets.
Greece’s 10-year bond yield fell 14 basis points to 1.42 percent, the lowest level since late November, while Italy’s 10-year bond yield fell 7 bps to 1.38 percent.