German, French Yields Fall to Records as Deposits at ECB Decline

Europe’s highest-rated government bonds rose, with German two-year yields falling to a record minus 0.042 percent, as the European Central Bank said overnight deposits from financial firms slid as it ended paying interest.

Yields on Austrian, Belgian, French and Dutch securities also fell to all-time lows as banks sought higher returns than they could get from the ECB or from German notes. So-called core bonds extended gains as the ECB said in its monthly bulletin that some of the risks to the economic outlook it warned about had materialized. Italian bonds dropped as the nation sold one-year bills and prepared to auction securities due between 2015 and 2023 tomorrow.