by Mish

As testimony to the ridiculous nature of ECB policy, Germany’s 10-Year Bond Yield Declines Below Zero for First Time.

Germany’s 10-year government bond yields tumbled below zero for the first time on record as a weakening global economic outlook fuels demand for perceived havens.
The nation joined Japan and Switzerland in having 10-year bond yields of less than zero. The plunge in yields, which has been driven by European Central Bank’s policy of negative interest rates and asset purchases, has accelerated after the weakest U.S. payrolls data in almost six years was reported June 3, and as polls indicate Britain’s vote on remaining or exiting the European Union is too close to call.
“Nobody buys bunds at these yield levels thinking they are attractive,” said Jussi Hiljanen, head of European macro- and fixed-income strategy at SEB AB in Stockholm. “Demand for haven assets is being driven by fear of Brexit and growth concern. Investors are buying bunds as a hedge against uncertainty.”

The idea that 10-year bonds trade at negative yields as a “hedge against uncertainty” is one of the silliest economic comments this month.

Mike “Mish” Shedlock

Currency Wars: Greek 10-Year Bond Yield Dips Below 2% as Bets on Rate Cuts Rise

For the first time ever, Greek 10-year bond yields dipped below 2%.

Negative Interest Rate Mutiny in Germany, Japan

Banks in Japan and Europe are fed up with central bank negative interest rate policies that cost the banks money.

Japan’s Negative-Yield, Inverted Bond Market Close to Breaking Point

Japan’s dysfunctional bond market is not only inverted between three month and eight years, it also sports negative yields out to 10 years.

Question of the Day: When Was the Last Time the Yield on German 10-Year Bonds Went Negative?

Think back. Many Mish readers been trading for 10 or 20 years. A few have been trading for 30 or more years.

New Financial Milestone: Negative Yield on 50-Year Bonds and Entire Swiss Yield Curve

Congratulations to Switzerland for reaching the mind numbing achievement of negative yields on 50-year bonds.

30-Year and 10-Year Treasury Yields Approach Record Lows

Curve Watchers Anonymous notes treasury yields on the 10-year notes and 30-year long bond are within spitting distance of all-time low yields.

Negative Yield Curves to Infinity and a Reader Question Regarding Fraud

The entire German yield curve is negative for 30 years. Japan is poised to join the club.

Alleged “Bond Shortage” as Japan Cruises Towards One “Quadrillion” Yen of Negative-Yielding Bonds

Bond Shortage! On Friday, yield on Japanese 10-year bonds hit a record low -0.135%. According to Bloomberg, the chief strategist of Bank of America Merrill Lynch in Tokyo stated those 10-year bonds look “relatively cheap”.

Safes Sold Out in Japan: Customers Hoard Cash in Response to Negative Rates

Safes Sold Out. In a Surprise Move, Japan joined the negative interest rate club on January 29.