Investors pay to have German debt – TVI24

The interest rate on German debt in the secondary market is, for the first time negative. Ie investors pay to have debt securities of Europe’s biggest economy.

According to analysts, this fall is related to the instability of the financial market, which contributes to uncertainty surrounding the that can happen in the UK on June 23 to vote on the exit or not the country of the European Union.

analysts believe that the decline of the “yield” German ten years are a result option for lower risk assets, trading stocks, for example, for debt securities.

the “yield” German ten-year is trading at -0.029%, after the lower value have been reached in April 2015 but never played negative rates in this maturity.

get away to the ‘safe’ without receiving anything in return

Germany joins was thus to Japan and Switzerland in the negative reference interest rate for debt underwriting to ten years

the interest of German debt to ten years now reached negative values ​​in the secondary market. (Reuters)

The fall in “yields”, which was conducted by the negative interest rate policy and the acquisition of assets by the European Central Bank, accelerated after the United States have revealed the worst data of wages in six years last donates 3 June. What added surveys that account for a very clear approach to the vote on 23 June, between those who want the output and in favor of staying in the European Union in the UK.

” nobody buys “bunds” – titles of German public debt – at these levels are attractive to believe that, “he told Bloomberg Jussi Hiljanen, chief European economist at SEB AB in Stockholm. “The demand for safe haven assets is being driven by fears surrounding the Brexit and growth. Investors are buying “bunds” to protect themselves from uncertainty. “

While the collapse of the” yield “is good news for governments, which are having little cost to take lending money and some cases receive a fee to keep the investors’ money, it is a sign that even intensifying stimulus to the economy, central banks struggle to boost growth and inflation.

According to Bloomberg, currently about EUR 2.4 billion deal to negative interest rates in Europe. Which means that all of these investors who buy debt now and stay with her until maturity will receive less than they paid.

For now, analysts believe that “yields” German ten years show signs that can reverse the trend as happened last year in April. After the fall, without ever touching negative values, there was a massive sales pulled to the “yield” up in less than two months.