LONDON: German government bond yields fell below zero for the first time in two months on Monday as investors shifted towards safe-haven assets with Spanish debt coming under pressure ahead of this week's bond auction.
The two-year German yield fell to -0.01 percent, its lowest since Sept. 5. The move into safe havens was accelerated by a selloff in riskier Spanish debt following Friday's surprise announcement that it would sell a new five-year bond and 20-year paper.
"The move started on Friday when Spain announced this week's supply," a trader said. "The five-year and the tap of the 2032 were both a surprise but the long-end was the bigger surprise and people were positioned out there."
The Spanish 10-year yield was 9 basis points higher on the day at 5.77 percent.
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