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Rate-Hike Bets Wipe Out $1.5 Trillion of Sub-Zero Debt in a Day

  • German five-year yield, U.S. 30-year real yield turn positive
  • Pool of global negative yielding debt shrinks most on record
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WATCH: The BOE’s rate-hike path could be short-lived, according to HSBC bond guru Steven Major.Source: Bloomberg
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The world’s enormous pool of negative-yielding debt shrank by a record 20% in just a day, signaling that negative yields might be a thing of the past if ever-bolder bets on policy normalization pay out. 

In both Germany and Japan, the world’s major bastions of negative rates, five-year yields climbed above zero on Friday for the first time in years. In the U.S., 30-year real yields turned positive for the first time in eight months after jobs growth in January far exceeded economist estimates. They were once part of a pile of such debt, which has dwindled to $6.1 trillion, a three-year low.