Short-dated German government bond yields set a new record low on Friday and were set for their biggest two-week fall in more than three years, highlighting demand for top-rated assets even as global bond markets take a beating.
Demand for top-rated German debt for use as collateral for short-term lending in repo markets has helped drive two-year bond yields lower this week. Jitters ahead of an Italian referendum on Dec. 4 has also bolstered safe-haven debt.
In early Friday trade, the two-year Schatz yield fell 2.5 basis points to around minus 0.76 percent, according to Reuters data. It was also set for its biggest two-week fall since July 2013, with a drop of about 14 bps.
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Dean Popplewell
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