The yield on the two-year German note tumbled Thursday to a new all-time low as expectations of further easing from the European Central Bank drove a rally in government bonds. The two-year German yield dropped to negative 0.578%, a record low, while the yield on the 10-year benchmark German bond, known as the bund, fell to 0.169%, according to Tradeweb. The ECB's recent communications have sent strongly dovish signals, said Jonathan Loynes, chief European economist at Capital Economics. The market-priced expectation is of a 10-basis-point cut to the ECB's deposit rate when the central bank meets on March 10, as well as an expansion to the bank's asset purchases.
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