LONDON: Demand for highly-rated euro zone bonds increased on Friday as investors focused on a deadly attack by a suspected Islamist militant in Barcelona and the difficulties US President Donald Trump faces in passing his economic agenda.

The yield on Germany’s benchmark government bond fell 2 basis points to 0.41pc as did those on other so-called ‘safe haven’ bonds which perform in times of stress.

Meanwhile, yields rose slightly on southern European bonds in the likes of Spain and Portugal in a global retreat from riskier assets.

Earlier on Thursday, US equivalents matched a six-week low of 2.182pc.

“Risk aversion is up following terrorist attacks in Spain and Trump concerns,” Commerzbank analyst Michael Leister said.

Spain mounted a sweeping anti-terror operation on Friday after the suspected Islamist militant drove a van into crowds on a popular tourist thoroughfare in Barcelona, killing 13 people before fleeing, in what police suspect was one of multiple planned attacks.

The death toll could rise, with more than 100 injured, authorities said.

Published in Dawn, August 19th, 2017