German average bond yield negative for first time

The average yield on German government debt has dropped below zero for the first time, an indicator of how the ECB’s bond-buying programme has made the previously unthinkable a reality.

Price gains on German bonds pushed yields through January 2024 below zero, driving the average yield to maturity on securities in the Bloomberg Germany Sovereign Bond Index to minus 0.003% at Wednesday’s close.

That means investors are prepared to accept losses for holding to maturity $809bn (€756bn) of the $1.16 tn total of bonds in the index. The yield on 10-year bunds, the eurozone’s benchmark, fell below 0.10%, yesterday, for the first time on record.