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Trillions of Negative-Yielding Debt Redeem Europe’s Bond Bulls

  • Amount of negative-yielding debt in region near six-month high
  • HSBC, ABN Amro see German yields at minus 0.5% by year-end
Market Reaction at Amsterdam Euronext NV Exchange
Photographer: Peter Boer/Bloomberg

A deepening pool of debt with yields below zero is vindicating bullish bets on European bonds. 

In a matter of weeks, German 10-year bond yields went from flirting with zero for the first time in two years to tumbling in July by the most since the start of 2020, all the way back to minus 0.46%. That decline -- which has ramped up bond prices -- has helped boost the amount of negative-yielding debt in Europe to 7.5 trillion euros ($8.9 trillion), near a six-month high.