Ten-year government bonds with negative interest – THE WORLD

For the first time investors have to pay money for it, that they place the ten-year German government bond in their portfolio:

There is a novelty in the history of the Federal Republic allowed. The yield of the paper that is issued regularly since the early 60s, fell on Tuesday below the zero percent mark. Insurance and pension funds, for the ten-year government bond is one of the main financial instruments worldwide, suffer from the negative interest rate, while German Finance Minister Wolfgang Schäuble rubs his hands. With the papers he financed the well a trillion-euro credit mountain of the covenant. Now Schäuble earned into debt even more money.

On the stock market, the yield on the pioneering ten-year Bunds temporarily fell to minus 0.034 percent. was driven the development of the European Central Bank, which buys government bonds for some time on a large scale in the market. In addition, investors flee for fear of an exit of Britain from the EU to “safe havens”. Bunds are in high demand, they are valid for experts as an almost risk-free investment. “Investors are currently trying to avoid any risk,” says Chief Economist Cyrus de la Rubia of HSH Nordbank. “It obviously just goes only to minimize losses, not to maximize profits.”

For bonds with shorter maturities negative interest rates are already everyday: The investment in two years Bunds is at a loss since the middle, 2014. Germany is the second country from the ranks of the seven leading industrial nations (G7), pay off its ten-year title below zero percent. The comparable Japanese bonds are the beginning of March in negative territory. “If the fears escalate to the Proposed referendum on United Kingdom membership of the European Union, it can go with the yield on ten-year bond down even further,” said Commerzbank chief economist Joerg Kraemer. But his colleague Folker Hellmeyer of Bremer Landesbank does not expect that the yields remain long in the negative range. “At the moment you buy from political risks the bunds, behind it no rational action, but a high emotional appeal.”

The market for government bonds is huge: On Change an average trading securities with a volume of around 20 billion euros to the owner.

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