German and UK bond yields sink to record low

German and UK bond yields sink to record low

German bond yields have sunk to a record low as investors turn away from equities in the run-up to a possible Brexit.

Benchmark 10-year German bund yields hit a low of 0.0021 percent, with UK bonds following suit; the yield on the UK’s 10-year gilt also dropped below 1.25 percent for the first time.

Analysts see a drop in bond yields as a “pessimistic” sign and a warning that investors are anticipating a prolonged downturn in the economy. The upcoming Brexit vote, as well as a weakening in China’s economy and weaker than expected US jobs figures are likely having an impact on investor sentiment.