Euro zone yields edge up as risk sentiment steadies after Trump remarks

By Stefano Rebaudo

Oct 17 (Reuters) - Euro area government bond yields edged higher on Friday, pulling back from multi-month lows, as Wall Street futures trimmed losses after U.S. President Donald Trump confirmed his meeting with Chinese President Xi Jinping was still on.

Earlier in the session, yields fell across the bloc, with German Bunds still on track for a fourth straight weekly gain, as investors sought safe-haven assets amid mounting concerns over the U.S. government shutdown, renewed trade tensions, and fresh signs of credit stress in the U.S. banking sector.

Trump said on Friday his proposed 100% tariff on goods from China would not be sustainable, adding that he would meet with Chinese President Xi Jinping in two weeks and that he thought things would be fine with China.

U.S. bank stocks, including Zions Bancorporation, Jefferies, and Western Alliance, fell sharply on Thursday as investors grew uneasy about risk in the sector, which has been shaken by exposure to two auto bankruptcies.

Germany’s 10-year Bund yields, the bloc’s benchmark, were flat at 2.57%, after hitting 2.523% early in the session, their lowest since June 25. They were set to end the week 6 basis points lower, in their fourth straight weekly fall.

Italy’s 10-year bond yields IT10YT=RR were 1.5 bps higher at 3.37%, after hitting a fresh 10-month low of 3.342%.