German 10-year yield dives again and hit new record low at -0.725%. ECB Governing council member Oilli Rehn is seen as the trigger for the free fall in yields. Rehn hinted that ECB is ready for a “significant and impactful policy package in September”.
There’s speculation that ECB would lower key interest rate by -10bps from the current -0.40%. And, the break of -0.7% level in 10-year bund yield is seen as significant, as could effectively be the new lower bound for ECB deposite rate after the new package.
