Most European bond yields are barely keeping their nose above water, but there's one place they're likely to keep finding interested investors: Europe.
"Domestic European investors are still very interested in European fixed income," David Zahn, head of European fixed income at Franklin Templeton, said. "They're actually looking for ways to diversify within Europe."
On their face, European sovereign bonds don't look like much of a draw for fixed income investors. Across the euro zone, yields on many short- to mid-dated bonds have turned negative in recent months. Germany's two-year Bund yields, for instance, are trading around negative 0.23 percent, with the curve not turning positive until the seven-year Bund. Its benchmark 10-year bond is yielding around 0.25 percent. France's two-year bond is trading around negative 0.13 percent.
How low can they go?
But with the European Central Bank (ECB) starting purchases of sovereign bonds under its new quantitative easing program, already low yields could get even lower; bond prices rise as yields fall.