The yield on the 10-year benchmark German bund fell into negative territory for the first time ever on Tuesday morning, amid global growth concerns and jitters over the U.K.’s upcoming referendum on its European Union membership.
At around 8.30 a.m. London time, the yield hit zero and briefly fell into negative territory as investors continued to flock to safe-haven assets. Bond prices and yields move in opposite directions and a negative yield implies that investors are effectively paying the German government for the privilege of parking their cash.
“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,” the agency said in an email to CNBC.
The latter is sparking volatility across financial markets with a beneficiary of the tumult being government bonds. The latest trigger has been two new polls out of the U.K. which showed the Brexit camp is gaining momentum.
Moves in some bond markets have been even more extreme. The 10-year Japanese government bond yield was at a record low of minus 0.163 percent on Tuesday afternoon.
Full article: German 10-year sovereign bond yields turn negative for first time (CNBC)