Investing.com - Global bonds rallied sharply this week, with yields on Japanese and German 10-year government bonds dropping deeper into negative territory on Thursday, as worries about a potential exit by the U.K. from the European Union left investors scrambling for safe haven assets.
A series of recent opinion polls showed support for the "leave" camp was picking up momentum ahead of the country's June 23 referendum. A vote by Britain to leave the European Union may tip Europe back into recession, putting more pressure on the global economy.
German 10-year bonds fell to an all-time low of -0.035%, while the 10-year Japanese government bond yield hit a record-low of -0.202%.
A negative yield implies investors are paying borrowers for the privilege of parking their cash.
Meanwhile, the yield on U.S. 10-Year Treasurys declined to 1.538%, the lowest since February, as fading expectations for U.S. rate hikes this year provided further fuel to a global bond market rally.
Market players are pricing in just an 8% chance for a rate hike in July and 29% for September, according to CME Group's (NASDAQ:CME) FedWatch tool. December odds were at about 48%.
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