German Bond Yields Near Zero, Greek 10-Year Bond Yield at Record 27%

Nigel Thomas
16 Apr, 2015
New York City

German government bond yield dropped near zero a day after the European Central Bank reaffirmed its commitment to bond-purchase program and print vast amount of new money. Greek bond yields jumped to new high as debt negotiations drag on.

[R]3:50 PM Frankfurt – German government bond yield dropped near zero a day after the European Central Bank reaffirmed its commitment to bond-purchase program and print vast amount of new money. Greek bond yields jumped to new high as debt negotiations drag on.[/R]

German government bond yield jumped to a new record high a day after the European Central Bank reaffirmed its commitment to continue to flood financial system with the newly printed money.

The yield on country’s 30-year bond dipped below 0.47% and on 10-year bond dropped to a new low of 0.073%.

The yield curve going as far as 2024 remain distinctly in the negative zone and the nation’s debt remains the most sought after fixed-income investment for its perceived safety.

Bond traders are factoring a near certainty of zero rate for 10-year bond as the European Central Bank continue to flood the market and act of its pledge to buy up to 1 trillion of bonds until September 2016.

In other news in the euro zone, Greek government bonds turned volatile and yield jumped sharply for 2-year bond and 10-year bond.

In a sign of inverted yield curve for the struggling nation, short term debt yield for Greece are significantly higher than the longer dated fixed income bond yield.

Two-year bond yield soared more than three percentage points to almost 27%, a record yield since the issuance.

In addition, 10-year bond yield increased by one percentage point to 12.6%, record high over two years.

The protracted negotiations between Greece and international lenders are going slow and the nation is struggling repay interest and refinance maturing loans in the summer months.

In addition, the U.S.-based rating agency with controversial record on European securities, Standard & Poor’s lowered its rating of Greek debt securities deeper into junk territory.

Investors and economists remain divided over Greece and the overall probability of Greece leaving or being forced out of the currency union remain high.