German 10-year bond yield hits record low, 8-year yield drops below Zero

FXStreet (Mumbai) - The German benchmark 10-year bond yield hit record low for the second consecutive session on Thursday, while the 8-year yield extended losses after having declined below zero levels on Wednesday.

The 10-year yield hit a record low of 0.087%; down 2.2 basis points for the day, while the 30-year yield fell 4.1 basis points to 0.463%. The yields at the short-end of the market curve have also come under pressure, although the drop is relatively less as compared to the fall in the long-end yields.

Negative yields

Moreover, German now has negative yields on the bonds up to 8-year maturity. The 9-year yield is also threatening to fall into the negative territory.

The latest fall in the yields was triggered by the ECB President Mario Draghi, who reiterated that the bond purchase program worth EUR 60 billion shall continue through 2015-2016. Draghi also said the talks of QE taper are ‘too early’ and the concerns of shortage of bonds as ‘little exaggerated’. There were rumors that the CB could back away from its EUR 1 trillion QE program due to shortage of bonds for purchases.