Germany's long-term yields reach record lows

Tuesday, 13. August 2019 13:21

The most widely tracked sovereign debt securities mostly jumped on Tuesday in a buying wave by investors who dumped stocks, anxious to preserve value. The shift pressed yields further downward with a special impact at the far end of the curve. Germany's ten-year yield marked another negative record together with the thirty-year measure. The United Kingdom's borrowing costs in the longest term were looking to reach their own all-time low while the equivalent in the United States has touched a level just above uncharted territory. The phenomenon is indicative of distortions in market conditions and not the state of the economy and finances, according to Fitch Ratings said and pointed to asset purchases by the Bank of Japan, the European Central Bank's expected resumption of such a program and the early end of the Federal Reserve's quantitative tightening.

The German two-year yield moved slightly higher to 0.87% under zero at 1:12 pm CET after the release of disastrous results of a sentiment survey. Today it dipped to a record 0.88% in the red. The 10-year Bund rate sank 1.4 points to 0.603% in negative territory following a drop to 0.614%. The 30-year gauge was down 3.7 points at minus 0.133% compared to the historic bottom at 0.142%. Corresponding futures slipped 0.01% and added 0.03% and 0.36%, respectively.

Britain's wage growth strengthened to an 11-year high and yields on debt maturing in two, ten and thirty years fell 0.6 points to 0.44%, 1.1 to 0.48% and 2.9 points to 1.143%, respectively.

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