Negative Yields

November 30th, 2015 5:33 am | by John Jansen |

Via the FT:

Swiss 10-year yield hits new low of -0.41%

How low can you go? No, really. This is getting bizarre.

Switzerland’s 10-year yield has hit a new record low of minus 0.41 per cent, as anticipation further easing at the ECB’s Thursday meeting drags European bond yields even deeper into negative territory, writes Joel Lewin.

Although Switzerland isn’t in the eurozone, further easing from the ECB could force the Swiss National Bank to follow suit.

The Swiss 10-year yield fell (meaning prices rose) 0.02 percentage points this morning, touching minus 0.41 per cent, breaking the previous record low of minus 0.39 per cent it hit last week.

The SNB has already slashed interest rates to a record low of -0.75 per cent, well below the ECB’s -0.2 per cent deposit rate.

The SNB cut the lower bound into negative territory for the first time ever in 2011, and has gradually taken it lower and lower, mirroring aggressive monetary easing in the neighbouring eurozone.

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