Germany has joined Switzerland and Japan in negative territory. The German 10-year benchmark sovereign bond declined to under zero for the first time ever Tuesday.
Due to a weak global economic outlook and investors fearing a Brexit, the 10-year bond yield ended the European trading day at -0.0020 percent, according to Bloomberg News.
The plummet in yields can be directly blamed on the European Central Bank (ECB) and its embracing of subzero interest rates as well as implementing its own form of quantitative easing.
Soon after the historic milestone was reached, the German Federal Debt Agency issued a statement:
“The federal debt-management strategy is long-term, therefore, the current absolute yield level plays only a subordinate role. Our target remains a sustainable balance between cost and planning security for the debt portfolio.”
Although Germany is grabbing a lot of the bond market attention, Japan should be generating massive headlines. The 10-year Japanese government bond yield was at a record low of minus 0.163 percent by the end of Tuesday.
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