RPT-GRAPHIC-Global bond yields slump to new lows -Citi

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LONDON, Feb 10 (Reuters) - Global government borrowing costs slumped to record lows this week as a combination of financial volatility, banking stress and slowing growth and inflation saw a flight to top-rated, liquid assets amid talk of ever lower interest rates.

Data from Citi showed the aggregate yield in its World Global Bond Index comprising 23 countries fell to 0.8464 percent on Tuesday, the lowest since the U.S. bank began compiling the index in the 1990s.

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Rates strategists at other banks said aggregate global bond yields have not been this low in decades, or probably ever.

Citi’s aggregate G5 and G7 sovereign bond yields, which capture sovereign borrowing costs in the world’s biggest and most industrialised economies, were also at their lowest since the U.S. bank began compiling the data.

Yields have tumbled since the turn of the year as fears over China’s economy, plunging oil prices and December’s U.S. interest rate hike have rattled investors and triggered huge demand for government bonds.

Japan’s 10-year yield fell below zero on Monday, the first time that benchmark has ever turned negative for a G7 nation, while Germany’s fell below 0.2 percent.

All Swiss yields out to 15 years maturity were negative this week , and the two-year German yield fell to a record low of -0.50 percent.

The value of government bonds around the world registering negative yields -- effectively a charge on lending to governments -- is now above $6 trillion, JP Morgan said this week.

Just two months ago, there were $3 trillion of bonds around the world with negative yields, and only 18 months ago there were none, according to JP Morgan.

Reporting by Jamie McGeever; Graphic by Gustavo Cabrera; editing by John Stonestreet