Agência para o Investimento e Comércio Externo de Portugal


Investors’ risk-off mood drove euro zone government bond yields lower on Tuesday, taking the cue from their U.S. counterparts, and pushing Portugal’s 10-year government bond yield below 0% for the first time on record.

Benchmark German 10-year Bund yields fell as well, as the French 10-year yields dropped to their lowest since the beginning of November.


Most U.S. Treasury yields were lower on Tuesday as investors tried to judge how quickly vaccines could be distributed to fight the COVID-19 pandemic.


“Portuguese bonds do correlate very highly with safer assets,” said Antoine Bouvet, rates strategist at ING.


Looking over a more long-term basis, the fall in Portuguese yields reflects “the continuation of the long term trend of yields going lower in the periphery, so it’s not a huge surprise,” Bouvet said.


“Still, it’s a milestone and it reassures that the combination of central bank policy and European Union policy have created an environment very favorable for this bond market,” Bouvet said.


Portugal’s 10-year sovereign bond yield dropped to as low as -0.01% and was trading down 2.5 basis points at -0.004%, joining the euro zone’s ever-growing pool of negative yielding debt.