The yield on Denmark’s 10-year government bond fell below zero for the first time amid growing concern over a European economic slowdown in the wake of the U.K.’s vote to leave the European Union.
The yield fell to as low as minus 0.0064 percent before climbing back above zero during morning trading in Copenhagen. The yields on two Danish bonds offered earlier Wednesday in a government auction also fell to record lows, according to Soeren Kristensen, an analyst with Sydbank.
“The ripples in the financial markets from Brexit are prompting investors to seek safe haven,” Kristensen said in a note. “In that category - safe haven - you’ll find at the moment Danish government and mortgage bonds.”
The flight into haven markets triggered by Brexit has driven the krone to its strongest level against the euro in more than a decade. In the hours after the June 23 referendum, Denmark’s central bank sold almost $750 million in kroner to weaken the currency, according to Jan Stoerup Nielsen, a senior analyst at Nordea in Copenhagen.
Denmark’s debt office sold 1.94 billion kroner ($290 million) of 2025 bonds at a yield of 0.01 percent after getting bids for 3.09 billion kroner. That compares with a yield of 0.38 percent in a June auction. The yield on 2018 notes fell to minus 0.62 percent, compared with a yield of minus 0.54 percent yield in June.