Germany’s benchmark 10-year bund yield, the benchmark for borrowing costs across the euro zone, fell into negative territory on Tuesday for the first time.

The 10-year bund yield fell as low as minus 0.002 per cent , according to data from Tradeweb.

A backdrop of unprecedented monetary stimulus from the European Central Bank and mounting political risks in Europe has boosted demand for German bonds - seen as one of the safest assets in the world.

The move towards negative rates may have unforeseen consequences. Bill Gross, the manager of the $1.4 billion Janus Global Unconstrained Bond Fund, said in a tweet last week that central banks have created “a supernova that will explode one day”.

Reuters