ANL 27.75 Decreased By ▼ -0.14 (-0.5%)
ASC 16.97 Decreased By ▼ -0.23 (-1.34%)
ASL 24.00 No Change ▼ 0.00 (0%)
AVN 91.83 Decreased By ▼ -0.38 (-0.41%)
BOP 9.55 Decreased By ▼ -0.12 (-1.24%)
BYCO 9.71 Increased By ▲ 0.01 (0.1%)
DGKC 110.71 Decreased By ▼ -0.29 (-0.26%)
EPCL 47.50 Decreased By ▼ -0.52 (-1.08%)
FCCL 21.45 Increased By ▲ 0.05 (0.23%)
FFBL 27.36 Decreased By ▼ -0.51 (-1.83%)
FFL 18.60 Decreased By ▼ -0.40 (-2.11%)
HASCOL 14.63 Increased By ▲ 0.01 (0.07%)
HUBC 86.07 Increased By ▲ 2.04 (2.43%)
HUMNL 7.09 Increased By ▲ 0.02 (0.28%)
JSCL 30.30 Decreased By ▼ -0.20 (-0.66%)
KAPCO 40.17 Decreased By ▼ -0.21 (-0.52%)
KEL 4.06 Decreased By ▼ -0.05 (-1.22%)
LOTCHEM 15.82 Decreased By ▼ -0.08 (-0.5%)
MLCF 42.91 Decreased By ▼ -0.20 (-0.46%)
PAEL 40.10 Increased By ▲ 0.04 (0.1%)
PIBTL 12.66 Decreased By ▼ -0.03 (-0.24%)
POWER 11.37 Increased By ▲ 0.12 (1.07%)
PPL 93.03 Decreased By ▼ -2.77 (-2.89%)
PRL 23.97 Decreased By ▼ -0.76 (-3.07%)
PTC 9.72 Increased By ▲ 0.08 (0.83%)
SILK 1.23 Increased By ▲ 0.01 (0.82%)
SNGP 45.38 Decreased By ▼ -0.45 (-0.98%)
TRG 107.59 Increased By ▲ 1.74 (1.64%)
UNITY 32.46 Increased By ▲ 0.56 (1.76%)
WTL 1.16 Increased By ▲ 0.01 (0.87%)
BR100 4,821 Decreased By ▼ -33.86 (-0.7%)
BR30 24,622 Decreased By ▼ -158.23 (-0.64%)
KSE100 45,624 Decreased By ▼ -278.86 (-0.61%)
KSE30 18,986 Decreased By ▼ -166.5 (-0.87%)
Markets

Three-quarters of euro govt bonds, a record high, now have sub-zero yields

  • The market value of euro area sovereign bonds with yields below 0% rose to around 6.53 trillion euros, or 73.25% of the total market as of the end of October.
  • Large swathes of peripheral bond markets joined the negative yield club last month as expectations for more European Central Bank stimulus grew.
02 Nov 2020

LONDON: Three-quarters of the 8.9 trillion euros ($10.35 trillion) worth of euro zone government bonds traded on Tradeweb had negative yields at the end of October, a record high, data from the electronic bond trading platform showed on Monday.

The pool of bonds with sub-zero yields, which effectively means investors are paying governments to hold their debt, widened further last month against the backdrop of a renewed surge in the coronavirus pandemic and expectations for more central bank stimulus to support the economy.

The market value of euro area sovereign bonds with yields below 0% rose to around 6.53 trillion euros, or 73.25% of the total market as of the end of October, Tradeweb said.

This was up from just over 6 trillion euros at the end of September and marked a record high in the data going back to 2016.

Large swathes of peripheral bond markets joined the negative yield club last month as expectations for more European Central Bank stimulus grew.

In Italy, for instance, sovereign bond yields out to four years now have negative yields versus out to three years a month ago.

Long-dated bond yields in Spain and Portugal have also lurched closer to the 0% barrier .

"When you have a worsening situation in terms of the coronavirus, you have a worsening economic outlook and increased expectations for more ECB stimulus," said Rene Albrecht, a rates strategist at DZ Bank. "So, that was a major factor in the move down in bond yields."

The market value of UK government bonds traded on Tradeweb with a negative yield was relatively stable at the end of October at around 1.2 trillion pounds, or 48% of a market worth around 2.5 trillion pounds.

According to Tradeweb, the pool of euro-denominated investment grade paper accounted for 1.37 trillion euros or almost 40% of a market worth roughly 3.5 trillion euros at the end of October. That marked the highest since August 2019 and was up from around 29% at the end of September.