Investors are paying to hold large chunks of European government debt — something that would have sounded absolutely absurd in 2011 or 2012.
Goldman Sachs analysts just sent round a chart below showing how dominant negative yields on European government debt have become. Pretty much half of all eurozone government bonds maturing in less than 7 years are offering a negative yield — a small portion of the 7-10 year bonds are doing the same. Although no euro-using countries have 10-year bonds yielding negative rates yet, Germany’s are currently offering just a 0.143% return (and falling).
It’s pretty amazing:
It’s a world away from the euro crisis just a few years ago — check out some of the countries included in the disclaimer there. Ireland’s two year bonds have negative yields, while they were above 14% less than four years ago. Spain’s 2-year yields are heading that way too: They’re currently yielding less than 0.1%.