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German Interest Rates Go Negative

Sam Ro   

German Interest Rates Go Negative
Stock Market1 min read

The German bond market is considered one of the safe-havens for investors looking to get out of riskier asset classes like stocks.

As tensions remain high on the Ukraine-Russia border, German bond prices have been rallying pushing yields lower and lower.

Earlier today, the yield on Germany's two-year bond actually went negative, touching -0.004%.

In other words, investors are effectively paying the German government to hold their money.

And it's not just geopolitical turmoil that has investors worried. Just this week, we learned Italy slipped into recession. In the past two days, German factory orders and industrial production reports unexpectedly turn negative, confirming fears of a slowdown in Europe's biggest economy.

New retaliatory sanctions from Russia today include a ban on food imports from the European Union.

So, there are a plenty of reasons why investor might flock to things like German bonds.

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