UBS | German 10yr bond yields have turned negative and some European corporates are effectively “being paid to borrow”. What are the implications for European equities? Although there has been a deepening of Global growth fears in recent weeks, economic surprise indicators and PMIs have not collapsed.
central banks negative rates
When there is no big demand for credit and, at the same time, the banks have little appetite to lend, they should focus on repairing balance sheets and not expanding them. And they can use those resources they hold with negative cost to repair their balance sheets.