German 10-year yield drops to lowest since May

The yield on the German 10-year government bond yield fell to two-month lows on Thursday after the government data showed the country’s gross domestic product (GDP) contracted 10% in the second quarter, the largest decline since 1970. 

The data reinforced the need for sustained monetary and fiscal stimulus and put a bid under government bonds, pushing the 10-year down to -0.545%, the lowest since May. 

Additional downward pressure on yields stemmed from the horribly weak US GDP data, which showed the world’s largest economy plunged by a record 33% in the second quarter.