Bonds: Falling interest rates in both the north and south

A fall in the European stock markets Tuesday had investors seeking back in the safe haven in the bond market.

Interest rates was sent down across most of Europe, after the German financial investors sentiment index, ZEW, revealed that the economists and the large pension funds are still skeptical when it comes to the economic outlook.

ZEW confidence indicator showed that investors' assessment of the current economic situation fell to index 12.6 from 18.2. Market expectations were, according to Bloomberg a decrease, but only to 18.0.

In turn, the expectations index for the economic development were slightly better than feared, but indicated with a negative value of 18.2 continued pessimism. Economists had expected a value of minus 20.0 from minus 25.5 in August.

In Germany, the ten-year yield fell 4 basis points to 1.63 per cent, and also in Spain and Italy indicated a clear drop in interest rates after ECB president Mario Draghi acquisition plan last week.

Spain could announce all sold out and then some of its bond auction of short-term securities. In total, they sold for 4.6 billion euro and at lower interest rates than at the last auction.