London — European stocks slipped and safe-haven government bonds were in demand early on Monday as the collapse of coalition talks in Germany served as a reminder of political risk that still runs as an undercurrent in Europe. Chancellor Angela Merkel said on Monday her efforts to form a three-way coalition government had failed, thrusting Germany into a political crisis and pushing Europe’s largest economy closer to a possible new election. German stocks led the move downward, with the country’s main index down more than 0.2%, pulling the main pan-European broader Euro STOXX 600 index lower by a similar amount. Investors instead preferred safe haven government bonds: the yield on Germany’s 10-year government bond, the benchmark for the bloc, edged lower to a one-and-a-half week low of 0.35% at one stage. "The collapse of the talks was a surprise and there is little clarity on how things will unfold from here. It adds to uncertainty, which is weighing on risk sentiment in world mark...
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