Global bond yields have been falling sharply in 2019. As highlighted in Exhibit 1, 28% of government bonds trade with a negative yield and 50% of government bonds trade with a yield of below 1%. In total, an estimated $10.4 trillion worth of debt currently trades with a negative yield, one of the highest levels since December 2017.
Much of the negative yielding debt is concentrated in regions such as the eurozone and Japan, who account for 36% and 62% of negative yielding government debt, respectively. However, negative yields are not just constrained to government bonds: $754 billion of corporate debt also trades with a sub-zero yield, mostly in the eurozone.
Low, or even no, yields in international bond markets have weighed on U.S. Treasuries with the U.S. 10-year falling by 73bps since November 2018. Despite its current low yield, the U.S. government bond market still looks to be the best house on the block. At a yield of just 2.50%, it is higher than 90% of other developed market government bonds.
Exhibit 1: Percentage of global government bonds yielding in negative territory
Source: Bloomberg, BofA/Merrill Lynch, J.P. Morgan Asset Management. Index shown is the BoFA/ML Global Government Bond index. Data are as of April 30 2019.