The German 10-year bunds yield continue to hover around record low on Monday, after testing its 2015 low of 0.05 percent last week, are likely to test zero soon as investors remained cautious ahead of the Federal Reserve meeting and Britain’s referendum.
Also, weak crude oil prices shifted investors’ interest towards fixed income securities.
Meanwhile, the yield on the benchmark 10-year bonds, which moves inversely to its price fell 1/2 basis point to 0.016 percent by 09:25 GMT.
In the global debt market, the benchmark 10-year US Treasury note yield marching lower towards 1.50 percent mark (fell nearly 2 basis points to 1.621 percent). The 10-year JGB hit a fresh all-time low of minus 0.158 percent.
The recent polls showed the outcome of the referendum is too close to call, raising the possibility that Britain might leave the EU after 43 years of membership in the bloc. According to a new Brexit poll by ORB published by the Independent on Saturday, the Leave camp has suddenly surged ahead with a lead of 55 percent, as compared to 45 percent for Remain.
On the other hand, the United Kingdom bookmaker, Betfair has reduced European Union referendum Remain probability to 70 percent compared to previous implied volatility of 78 percent, after ORB poll.
The German bunds have been closely following developments in oil markets because of their impact on inflation expectations. Today, crude oil prices fell below $50 in a week as US drilling data showed another uptick, reinforcing views that the recent rally may restrain the rebalancing in oil markets. The International benchmark Brent futures fell 0.81 percent to $50.13 and West Texas Intermediate (WTI) dipped 1.30 percent to $48.43 by 09:25 GMT.
Looking ahead, Bank of Japan Governor Haruhiko Kuroda will make a decision on stimulus on June 16 and the Federal Open Market Committee (FOMC) gathering scheduled for June 14-15. The U.K. decision on whether to remain in the European Union on June 23 is also weighing on investors’ minds.
Meanwhile, the German stock index DAX Index down 1.44 percent at 9,693 by 9:25 GMT.
