German government bonds advanced alongside other European sovereign debt as falling equity markets spurred safe-haven demand, though gains lagged behind those of U.S. Treasuries and UK gilts. Ongoing concerns about potential risks posed by artificial intelligence to multiple sectors of the global economy remained a key focus.

The Ifo Institute's survey of German business confidence had limited market impact; the index came in at 90.5, slightly above the median forecast.

UK gilts saw a bull-flattening trend, pushing the 10-year yield to its lowest level since December 2024.

Bank of England rate-setter Alan Taylor stated that the impact of U.S. tariffs on global trade and UK inflation would persist for years.

Market data: - German 10-year bond yield fell 2 basis points to 2.72%. - German bond futures rose 22 ticks to 129.56. - Italian 10-year bond yield dropped 2 basis points to 3.32%. - The Italy-Germany yield spread remained largely unchanged at 61 basis points. - French 10-year bond yield decreased 2 basis points to 3.28%. - UK 10-year gilt yield declined 3 basis points to 4.32%.