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‘Why Am I Holding This?’ Saying Bye to Europe’s Negative Yields

  • Region’s negative-yielding debt pile is down a third from peak
  • Repricing comes as investors brace for tighter monetary policy

On a recent visit to the United Arab Emirates, European Commission Director-General Gert Jan Koopman said he “had a pretty difficult time explaining” to investors why they should be purchasing assets in Europe that yield less than zero. Soon, he might not need to.

The amount of debt in the euro-area with a negative yield has dropped by more than a third from a peak in 2020. In a sign of the broader repricing that’s afoot, the yield on German bunds, the region’s paragon of safety, briefly rose above zero for the first time in three years this week.