LONDON, Dec 2 (Reuters) - German 10-government bond yields climbed to a one-week high on Monday as a new leadership of the Social Democrats threatened the ruling German coalition.
The new leaders of the Social Democrats (SPD) are demanding a shift in policies, and several senior conservatives on Sunday ruled out talks to renegotiate a governing agreement.
“Whatever actually happens from here, this news will likely get markets excited about an easier path to more German fiscal policy in the future,” Deutsche Bank strategists said in a note.
Benchmark German bond yields were higher across the board with 10-year yields up 5 bps at -0.303% in early European trading, leading a broader rise in European borrowing costs. (Reporting by Saikat Chatterjee; Editing by Dhara Ranasinghe)