ETFs designed to track German sovereign bonds rallied Wednesday amid Eurozone debt jitters as the yield on two-year notes dropped to zero for the first time ever.
PowerShares DB German Bund Futures ETN (NYSEArca: BUNL) was up nearly 2% in U.S. afternoon dealings. The exchange traded note has seen trading volume increase sharply the past month on concerns Greece will leave the euro.
The euro fell below $1.24 on Wednesday “as worries mounted about Europe’s debt crisis and the effective yield on the German government’s two-year bond yield touched zero, as investors chose the option of getting their money back over earning a high return,” CBS News reported.
The average yield on German two-year government notes since the euro’s inception is 2.79%, Bloomberg News reported.
Investors were seeking safe havens while Spanish bond yields spiked as high as 6.7% on worries over the country’s finances and banking system. [German Bond ETF Volume Rises as Yields Hit Record Low]