German 10-year bond yield turn negative for first time since 2016 amid fears of a recession

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Germany’s 10-year government bond yields slipped into negative territory on Friday for the first time since October 2016.

Hitting a low of -0.001 percent, the 10-year bond yield’s downturn comes amid rising concern about the direction of the euro zone’s largest economy, with a string of weak data in recent months fueling speculation that Germany could be heading for recession.

IHS Markit’s PMI survey published Friday revealed that Germany’s manufacturing sector contracted for the third consecutive month in March, with output growth nearing a six-year low.

German government 10-year bond, an important benchmark for European fixed income assets, is viewed as a safe-haven for investors. In times of uncertainty, investors tend to move their investments from riskier assets into safe-havens like gold and German government bonds. The bond yields hitting negative territory shows there is a rising demand for the 10-year paper due to the ongoing uncertainty in the euro


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