Brexit Fears Drive Global Bond Yields Lower

by Marilou Long on June 15, 2016

in currencies,Foreign Markets,Geopolitical,interest rates

The German 10 year yield fell below zero yesterday for the first time. From the linked NYT article:

Fear is probably paramount. A sluggish global economy and uncertainty surrounding the coming vote in Britain over whether to leave the European Union have some investors rushing for safe havens.

The European Central Bank is also printing money to buy bonds in an effort to bolster the eurozone’s weak growth. That has pushed prices higher, and made yields go down.

It has all created a topsy-turvy world for bonds, where investors are actually paying governments for the privilege of holding their debt. The German 10-year bonds are just the latest to fall into negative territory, after those in Switzerland and Japan. Yields on German five-year bonds fell below zero last year.

The video below is of Andy Brenner, the head of international fixed income at National Alliance Securities, discussing the probability of a Brexit vote.

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