German Bund yields have reached unprecedented lows as investors seek safe-haven assets amid concerns about global economic prospects. The yield on the 10-year Bund, a benchmark for Eurozone borrowing costs, fell to a record low of 0.7%, highlighting the persistent deflationary pressures within the Eurozone and the uncertainty surrounding the Greek debt situation.

The ongoing negotiations between Greece and its creditors have fueled anxieties about a potential Greek exit from the Eurozone, prompting investors to move capital into safer assets like German government bonds. This increased demand has driven up Bund prices and, consequently, pushed yields down to historic lows.

Analysts suggest that the European Central Bank’s (ECB) quantitative easing program, which involves purchasing government bonds, has also contributed to the decline in yields. The ECB’s bond-buying program is designed to stimulate economic growth and raise inflation, but it has also had the effect of suppressing borrowing costs across the Eurozone.

The record-low Bund yields reflect a broader trend of low interest rates and subdued inflation in developed economies. Central banks around the world are grappling with the challenge of stimulating economic growth in the face of weak demand and persistent deflationary pressures.

The situation remains fluid, and market participants are closely monitoring developments in Greece and the global economy for further clues about the future direction of interest rates and bond yields.