Germany’s 10-year government bonds advanced for a sixth day as the nation allotted 3.39 billion euros ($3.65 billion) of five-year debt at a record-low yield.
The yields on German two-, 10- and 30-year debt dropped to all-time lows. Germany’s finance agency sold notes due in April 2020 at an auction yield of minus 0.10 percent, down from minus 0.08 percent at a previous sale on Feb. 25, which was the first time the nation allocated five-year securities at a yield below zero. Italian and Spanish 10-year bonds advanced for a third day as a report confirmed euro-region manufacturing output expanded last month.
Germany’s 10-year yield fell one basis point, or 0.01 percentage point, to 0.167 percent at 5:14 p.m. London time, after earlier dropping to 0.151 percent, the lowest since Bloomberg began compiling the data in 1989. The benchmark 0.5 percent bund due in February 2025 rose 0.13, or 1.30 euros per 1,000-euro face amount, to 103.255.
The yield on the nation’s 30-year bund slipped as low as 0.588 percent, while that on the two-year security touched minus 0.26 percent. The five-year note yield was at minus 0.11 percent in the secondary market.
A negative yield means investors buying the securities now will get less back when the debt matures than they paid. The yield on about a quarter of the euro-area securities is now below zero.
Markit Economics said its Purchasing Managers Index increased to 52.2 in March from 51 the previous month. That was the highest in 10 months and exceeded a preliminary reading of 51.9. It’s above the 50 level that divides expansion from contraction.
Italy’s 10-year bond yield fell one basis point to 1.28 percent and Spain’s declined one basis point to 1.21 percent.
German government securities returned 3.7 percent in the quarter through Tuesday, the best performance since the three-month period ended September 2011, according to Bloomberg World Bond Indexes. Italy’s earned 5.7 percent and Spain’s 3.9 percent, the indexes show.