Benchmark 10-year euro zone sovereign bond yields fell to a fresh record low below zero on Friday as investors rushed to the safety of German...
Benchmark 10-year euro zone sovereign bond yields fell to a fresh record low below zero on Friday as investors rushed to the safety of German government debt after Britain’s dramatic and historic decision to leave the European Union.
The yield fell as low as -0.09 percent, according to Tradeweb data, before recovering some ground to -0.3 percent.
Investors sold riskier euro zone bonds like Spanish and Irish paper. The spread between Irish and German bond yields widened as much as 20 basis points to 88 basis points , and the Spanish/German yield spread widened a similar amount to 158 basis points.
“On the European continent, we have to brace ourselves for serious ripple effects. The Brexit shock, the resulting uncertainty and likely market upheaval will also dampen growth in the euro zone for the remainder of this year,” said Holger Schmieding, chief economist at Berenberg Bank in London.