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U.S. and German bond yield gap shrinks on Trump doubts
March 22, 2017 / 7:37 AM / 6 months ago

U.S. and German bond yield gap shrinks on Trump doubts

LONDON, March 22 (Reuters) - The difference between U.S. and German government borrowing costs was the lowest it has been in four months on Wednesday as investors started to have doubts over promises of a fiscal boost for the world’s largest economy.

President Donald Trump is trying to rally support behind his healthcare bill but investors are worried failure to do so could portend trouble for promised tax cuts and relaxed regulation expected to support growth and tighter monetary policy.

As U.S. shares suffered their worst day since Trump’s election in November on Tuesday, 10-year U.S. Treasury yields -- an indicator of the rate at which the government can borrow in financial markets -- dropped to a three-week low of 2.40 percent.

Meanwhile, German equivalents were a tad lower when European markets opened on Wednesday but within sight of 13-month highs struck just over a week ago. At around 195 basis points, the gap between the two was the lowest since November. (Editing by Nigel Stephenson)

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