Ten-year federal bonds have their sights set on the zero percent mark

Frankfurt The European Central Bank (ECB) is still sticking to its loose monetary policy and buying bonds, but investors are getting more nervous. Government bond prices are falling and, in return, yields are rising. In Germany, the yield on ten-year government bonds – the bond in the euro area that is most regarded as a valuation benchmark for many investments – approached the zero percent mark again.

On Monday it peaked at minus 0.07 percent – it was heading for the highest level in two and a half years. In mid-August, the yield was still just under minus 0.5 percent – after that, the rising inflation rates in particular caused prices to fall and yields to rise. In May, with the first signs of rising inflation rates, the ten-year Bund yield had already approached the zero percent mark down to 0.1 percentage point. But then she fell back again.