German 10-year bond yields turn positive for the first time since 2019

Germany’s 10-year bond yield, the benchmark for borrowing costs across the euro zone, crossed zero for the first time since 2019, as investors bet central banks would need to withdraw stimulus to slow inflation.

On Wednesday, the 10-year German Bund yield was as high as 0.009%, its highest level since May 2019, reflecting lower bond prices. In mid-December, the Bund yields registered About minus 0.4%.

This Global yields riseLed by the U.S., reflects investor anxiety that policymakers need to act quickly to cool the strong price growth that has dominated large economies.

Eurozone inflation climbs to 5% Last December, a record since the creation of the single currency more than 20 years ago, has raised doubts about how quickly price pressures have eased this year.

At its December meeting, the ECB announced that it would continue to buy assets after the end of its emergency bond-buying programme in March, but at a slower speed exceeded investors’ expectations.

Plus signs that the U.S. is moving in that direction tightening policy, pushing up German bond yields.

Across the Atlantic, two-year U.S. government bond yields, considered particularly sensitive to changes in monetary policy expectations, up to 1% On Tuesday, it was the first time since February 2020 as markets priced in four rate hikes by the Federal Reserve this year.

The sell-off in government debt also points to investor confidence that the Omicron coronavirus variant will not derail the global economic recovery, potentially giving central banks an opportunity to reduce purchases and raise interest rates.

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