European bond yields fall as oil prices drop, widening France-Germany spread

European government bond markets saw German 10-year Bund yields fall on October 20, trading around the upper-3.3% range by 16:00 London time, about 0.08% lower than the previous day, as oil prices dropped sharply. The decline followed a rapid fall in Brent crude futures, which briefly dipped below $106 per barrel, down over 3% from earlier highs near $112. Weak US housing data also pressured long-term rates lower across Germany and France. French 10-year yields also fell but less sharply, widening the spread over German Bunds to about 1.5%. UK gilt yields declined to the upper-5.3% range, though expectations of a Bank of England rate hike limited buying.