During the 2nd quarter of 2018 the prices of core government bonds rose. The yield-to-maturity of the ten-year German government bond dropped by 20bps at 0.30%, while the yield of the two-year German government bond dropped by 7 bps to -0.67% causing the yield-to-maturity curve to slightly flatten. The European Central Bank (ECB) left its interest rates unchanged. The European Central Bank (ECB) has maintained the reference rate unchanged. It also announced that the securities purchase program will be reduced to € 15 billion a month from € 30 billion after September and will end in December 2018. In addition, President Draghi mentioned that interest rates will remain at their current levels at least until the summer of 2019. Concerns about political developments in Italy and Spain and the possible effects of protectionist measures keep the government bonds yields at low levels. Government bonds of the periphery, mainly in Italy, significantly underperformed as a result of the Italian political crisis. In Italy, the two anti-systemic parties, the Five Star Movement and the Northern League, reached an agreement to form a coalition government. However, uncertainty around the new government remains. Moody's has reviewed Italy's Baa2 rating for possible downgrade. In Spain, the Socialist Party held a vote of no-confidence against Prime Minister Rahoy, following a conviction in the corruption case involving members of the ruling party. The motion of no-confidence was voted in favor, and the prime minister’s position was immediately taken by socialist Pedro Sanchez