German 10-year yield sinks to 29-month low

Wednesday, 27. March 2019 16:13

Benchmark market rates for sovereign securities issued by the government in Berlin dipped under Japanese equivalents for the first time in almost two and a half years on Wednesday after joining them in negative territory last week. Government bonds surged together with British paper and United States Treasuries as well on dovish tones from the major policymakers, particularly European Central Bank President Mario Draghi. Today he indicated a possibility to roll out measures to offset the plunge in bank profitability and other countereffects from the phenomenon.

The share of high-quality corporate debt with negative yields has been growing as well. Risk aversion today was exacerbated by ongoing Brexit uncertainty before a vote in the United Kingdom Parliament. Earlier, Germany sold €2.4 billion in 10-year Bunds with the yield at 0.05% under zero, the lowest mark since September 2016, and offers exceeded the package by 2.6 times.

The two-year measure slumped 5.2 basis points to minus 0.61% at 4:12 pm CET. The ten-year yield was down 6.6 points at 0.08% below zero, after dipping to a negative 0.087% for the first time since early October of 2016 on a closing basis. The 30-year bond yielded 0.549% or 3.3 points less for the day. Corresponding futures were higher by 0.09%, 0.49% and 0.55%, respectively. British yields for maturities of two, ten and thirty years slipped 0.3 points to 0.663%, 1.8 to 0.991% and 1.8 points to 1.511%.

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