German 5-year bund yield matches ECB’s deposit rate

FXStreet (Mumbai) - The yield on the 5-year German bund yield dropped to -0.20%, which is the deposit rate of the European Central Bank (ECB).

The 2-year yield now stands at -0.424%. Meanwhile, the benchmark 10-yr yield stands at 0.452%. The yields, especially at the short-end of the curve, have come under pressure even since Draghi hinted at more easing at December 3rd meeting.

Moreover, the market expects the ECB to cut deposit rate next week, while the likelihood of an increase in the size of the QE program had dropped offlate.