Bund yields fall as investors seek safe havens amid AI concerns

The euro area's benchmark Bund yields dropped on Thursday as investors rushed into safe-haven assets after tech stocks tumbled overnight while catching up with an overnight decline in US Treasury yields.

Tech stocks took a beating and credit markets wobbled on Thursday as crowded bets on data centres and other AI infrastructure faced a reckoning from high interest rates.

Germany's 10-year government bond yields, the euro zone benchmark, were down 6.5 basis points to 3.40%. They have moved between about 3.40% and 3.50% since early this month.

Oil prices fell more than 1% as investors weighed risks to supply against US efforts to cut petroleum shipping costs by easing sanctions on so-called shadow fleet vessels.

The German 2-year government bond yield, more sensitive to policy rate expectations, fell 4 bps to 3.06%.

Money markets priced in a depo rate at 3.21% by late 2027, from the current 2.50%, and at 2.73% by December.

The yield gap between French OATs and German Bunds was roughly unchanged at 142 bps, after hitting 158.67 in early October, the highest level since November 2011.

The Italian spread rose 3 bps to 111 bps, after reaching 129.74 early this month, the widest since April 2025.