$1 Trillion in Bonds Have Left the Negative-Yield Zone This Year
- Inventory of sub-zero debt falls to lowest since July
- Positive yields reflect inflation expectations, QE unwinding
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As the global bond market comes to terms with the unwinding of quantitative easing from the U.S. to Europe, it’s cutting inventory of the assets that bear the hallmark of a decade of distortion: negative-yielding debt.
In the first eight trading sessions of the year, the pool of bonds with sub-zero yields has shrunk by about $1 trillion to $7.3 trillion, the smallest since July, signaling an uptick in growth and inflation prospects that’s helping to normalize bond markets around the world.