German 10-Year Yields Drop Below Zero for First Time Since 2016
- Contraction in manufacturing industry spurs demand for safety
- Sovereign bond markets across the world are also rallying
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German 10-year bond yields dropped below zero for the first time in more than two years after the nation’s manufacturing sector fell deeper into contraction, compounding fears of an economic slowdown across the euro area.
The securities, seen as some of the safest that investors can buy, have rallied this year as inflation and growth data have disappointed, while the global economic outlook has also worsened. Friday’s move reverberated through to global markets, with the yield on benchmark Treasury notes falling to the lowest in more than a year.