Government bond yields were down earlier today as investors reacted to recent inflation data in the eurozone as well as the surprise move by the Bank of Japan to introduce a negative interest rate on deposits.
Data from Tradeweb point to bid yields falling further into negative territory on a number of securities issued by Germany, France, Italy and Japan.
- The German 2-year bond bid-yield fell to -0.477% at 9:32am UK time.
- The German 5-year bond bid-yield fell to -0.297% at 11:20am UK time.
- The French 2-year bond bid-yield fell to -0.397% at 10:38am UK time.
- The French 5-year bond bid-yield fell to -0.121% at 11:26am UK time.
- The Japanese 2-year bond bid-yield fell to -0.079% at 9:17am UK time.
- The Japanese 5-year bond bid-yield fell to -0.066% at 4:35am UK time.
- The Japanese 10-year bond bid-yield fell to 0.102% at 9:37am UK time.
- The Italian 2-year bond fell below 0%, touching -0.004% at 8:26am UK time.
According to Eurostat figures, inflation in the eurozone rose to an annualised rate of 0.4% in January from 0.2% in December. This rate is still significantly lagging the European Central Bank’s medium term inflation target of 2%, and the moves on yields suggests that investors may be concerned that growth in Europe is still too slow to expect interest rates to start moving up anytime soon.