Cash & Liquidity ManagementInvestment & FundingCapital MarketsSwitzerland Sells 10-year Bonds at Negative Yield

Switzerland Sells 10-year Bonds at Negative Yield

Switzerland has successfully auctioned 10-year government bonds at a negative yield, in what is reported to be the first time that a government has been able to make investors pay for the privilege of lending to it for such a lengthy period.

The Swiss Federal Treasury said it sold 232.501m Swiss francs (CHF) – equivalent to US$242m/€222.9m – of bonds maturing in July 2025 at a yield of -0.055%. The bonds carry a 1.5% percent interest rate. At the previous auction of the bonds, in February, they sold at a then record low yield of 0.011%.

A third of eurozone government debt now carries negative yields; a trend that has accelerated since the European Central Bank (ECB) last month launched its quantitative easing (QE) programme to buy €1 trillion of bonds.

While several other European have sold shorter dated government debt at sub-zero yields, this is the first time that a major nation’s 10-year debt has been sold at a negative yield. Investors have continued to buy debt on growing fears of a prolonged period of deflation.

The Swiss National Bank (SNB) surprised markets in January by scrapping its cap on the CHF’s value against the euro, leading to a surge in the Swiss currency that could also contribute to a move into deflation.

Related Articles

Risky business?

Capital Markets Risky business?

4w Nina Brumma
"The architecture of financial markets has changed": Stefan Bielmeier, DZ Bank

Automation "The architecture of financial markets has changed": Stefan Bielmeier, DZ Bank

3m Victoria Beckett
Why Ferguson Plc opts for floating rate debt: Bellin 1TC conference day 2

Capital Markets Why Ferguson Plc opts for floating rate debt: Bellin 1TC conference day 2

3m Victoria Beckett
Short-staffed treasurers need automation over faster payments : TD Bank executive

Automation Short-staffed treasurers need automation over faster payments : TD Bank executive

6m Victoria Beckett
Singapore Fintech Festival day three: trade finance, capital markets and financial inclusion

Asia Pacific Singapore Fintech Festival day three: trade finance, capital markets and financial inclusion

6m Richard Hartung
UK businesses see sterling alternative as euro corporate paper continues to fly high

Capital Markets UK businesses see sterling alternative as euro corporate paper continues to fly high

7m David Vials
China after the national congress – the outlook for the RMB

Capital Markets China after the national congress – the outlook for the RMB

7m Richard Hartung
Investing in cat bonds: it's going down a storm

Capital Markets Investing in cat bonds: it's going down a storm

8m Clive O'Connell