RPT-Euro falls, bond yields up on report Germany's Merkel won't seek re-election as CDU party chair
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LONDON, Oct 29 (Reuters) - The euro fell briefly and Germangovernment bond yields rose on Monday, after a report thatGerman Chancellor Angela Merkel has told leaders of herChristian Democrats (CDU) that she will not seek re-election asparty chairwoman in December. Merkel has been CDU chairwoman since 2000 and giving up therole would start a race within the party to succeed her aschancellor.
The euro fell as much as 0.4 percent to the day's low of$1.1361 after the news. It later erased some of thoselosses to trade down 0.1 percent at $1.1389, roughly where itstood before the report.
The euro zone's leading stock index rose 0.7percent by 0941 GMT and Germany's DAX gained 1.1percent. Both indices benefit from a weaker euro helpingexporters.
German bond yields extended their rise, with the 10-yearBund yield last up almost 4 bps at 0.39 percent.
"This news would signal the quality of German credit woulddeteriorate because markets are extrapolating from the resultsof the weekend state election to conclude that the nextgovernment will have a bigger populist portion to it," saidMizuho rates strategist Peter Chatwell.
(Reporting by Dhara Ranasinghe, Tommy Wilkes and Helen Reid,Editing by Abhinav Ramnarayan)
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