Safety Premium: Germany Sells Six-Month Bonds at Negative Yields for First Time
January 10th, 2012Via: BBC:
Investors are flocking to havens to store their cash, amid continuing worries about the eurozone debt crisis.
Germany sold 3.9bn euros (£3.2bn) of six-month bonds at an average yield of -0.0122%, the first auction with a negative yield.
That means investors are effectively willing to pay Germany for the privilege of lending to it.
Meanwhile the European Central Bank revealed a new record for the amount of cash lodged with it overnight by banks.
Overnight deposits hit 464bn euros.
Traders said they could hit half a trillion euros by next week.
High deposits can indicate banks prefer the safety of the central bank for their funds to the higher rates they could get by lending to each other.
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