Europe's pool of negative-yielding government bonds declined in December to its smallest size since May, Tradeweb data showed on Thursday.
Trade optimism and the hopes central bankers can engineer a soft landing in the global economy in 1H20 have been some of the reasons behind the shrinking negative-yielding government bonds.
Eurozone government bonds quoted by Tradeweb showed negative yields fell to 4.14 trillion euros in December, which is about 52% of the total eight trillion-euro market. The latest figures are down from 57% in November.
In September, the negative-yielding government bonds surged to the highest level ever, at 5.63 trillion euros, or about 70% of all government bonds in Europe were negative.
As for the global pool of negative-yielding bonds, well, it peaked at around $15 trillion last year and has been estimated by Tradeweb to be around $12 trillion today.
And if the global recovery that markets have already priced in doesn't materialize -- then it's likely that a mad-dash back into bonds could be seen, destined to increase the pool of negative-yielding government debt to new record levels. Perhaps that is what gold is expecting.