German seven-year yields move into negative territory

German seven-year government bond yields moved into negative territory on Thursday morning.

That followed strong demand at the previous day's auction of five-year notes by Berlin, which saw the bid-to-cover ratio jump to 2.1, from 1.1 the last time around, despite the negative yields of -0.08% on offer.

Acting as a backdrop, on Tuesday the Footsie hit a more than 15-year high. Despite that the returns on UK equities over the last two and a half decades had lagged that on Gilts, confounding what theories such as the equity risk premium (ERP) would seem to predict - although the top flight's index broad international exposure may be a factor to take into account.

ERP holds that if equities are the riskier investment then they should return more than fixed-income assets.

On Wednesday broker Citi flagged the budding political risks in the single currency area, given the possibility of a break-up of the monetary union.