European top-rated corporate debt with negative yield swells to 40% of market - Tradeweb

LONDON, Aug 1 (Reuters) - More than 40% of European investment grade corporate debt is now negative yielding, Tradeweb data showed on Thursday, as expectations for lower interest rates prompt more buying of company debt.

The volume of corporate euro investment grade bonds with a negative yield on the Tradeweb system rose to 1.4 trillion euros on July 31, equating to 42% of the market, the data showed. A year earlier that number was less than half a trillion euros, or 17.9% of the overall market.

The pool of euro zone government bonds with negative yields also surged in July to 4.8 trillion euros or around 60% of the total, the highest proportion since August 2016, according to the Tradeweb data.

The share of euro zone government bond yields trading below the European Central Bank’s -0.4% deposit rate has also increased to 42%, up from 36% a month earlier.

Of around the 8 trillion euros of euro area government bonds in the Tradeweb system, the proportion of debt yielding less than zero rose sharply to match levels last seen in August 2016. (Reporting by Virginia Furness Editing by Tommy Wilkes)