Economics
German Bunds Reach New Milestone as Yield Declines Below Zero
- Brexit risk, economic outlook stoke demand for havens
- Nation follows Switzerland, Japan with negative 10-year yield
Markets and Bonds Feel Impact of Brexit Jitters
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The yield on Germany’s 10-year government bund, Europe’s benchmark security, fell below zero for the first time on record, as investors’ seemingly insatiable demand for haven assets created another bond-market milestone.
The nation joined Japan and Switzerland in having 10-year bond yields of less than zero. The plunge in yields, which has been driven by European Central Bank’s policy of negative interest rates and asset purchases, has accelerated amid a weakening global economic outlook and as polls indicate the “Leave” campaign in Britain’s European Union referendum is gaining momentum.