The Netherlands has joined a select group of countries able to boast of negative borrowing rates on 10-year debt.For the first time, yields on benchmark Dutch government bonds dipped below zero – hitting minus 0.0001 per cent on Friday afternoon, reports Elaine Moore in London.
As the coupon on bonds is fixed at issue, yields falls as prices rise.
Around the world, the volume of government bonds trading with yields below zero has jumped by more than $1tn in the last month to around $12tn as investors lower their expectations for global growth and inflation and bet on central banks to step in and cut interest rates.
But only five countries have seen 10-year rates drop below zero: Germany, Switzerland, Japan, Denmark and now the Netherlands.
Benchmark 10-year German Bunds trade at a negative yield of 0.17 per cent, while Danish bonds yield minus 0.01 per cent and Japanese bonds minus 0.28 per cent. No Swiss government bonds have a positive yield and 10-year securities yield minus 0.61 per cent.
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