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1 Apr 2015
German yields fall for five straight quarters
FXStreet (Mumbai) - The bond yields in Germany ended the first quarter lower, thereby confirming losses for the fifth consecutive quarter.
The drop in the first quarter was largely driven by the European Central Bank’s (ECB) sovereign QE program and deflation fears. Limits imposed by the ECB on its quantitative easing scheme have shrunk the number of German bonds it is able to buy. Meanwhile, the country remains committed to avoiding adding to its overall debt stock this year. Both the factors have pushed the yields to new lows.
The German 2-year yield hit a record low of -0.247% in the previous session, before recovering slightly to trade today at 0.25%. The 10-year yield is trading at 0.176%, not far away from the record low of 0.165%.
Germany has negative yields on the bonds with maturity of 7 years. As per Commerzbank, 14 percent of German bonds with maturities above two years have yields below -0.20%, the ECB's deposit rate which marks the lower limit for its purchases.
The drop in the first quarter was largely driven by the European Central Bank’s (ECB) sovereign QE program and deflation fears. Limits imposed by the ECB on its quantitative easing scheme have shrunk the number of German bonds it is able to buy. Meanwhile, the country remains committed to avoiding adding to its overall debt stock this year. Both the factors have pushed the yields to new lows.
The German 2-year yield hit a record low of -0.247% in the previous session, before recovering slightly to trade today at 0.25%. The 10-year yield is trading at 0.176%, not far away from the record low of 0.165%.
Germany has negative yields on the bonds with maturity of 7 years. As per Commerzbank, 14 percent of German bonds with maturities above two years have yields below -0.20%, the ECB's deposit rate which marks the lower limit for its purchases.