The bond yields across the core European nations took a hit as bond traders were surprised by Riksbank’s surprise rate cut that took the interest rate further into the negative territory. German 2-yr yield dropped to a record low of -0.538%. The 10-yr yield dropped more than 8 basis points to 0.16%. French 2-year has dropped 2bps to a new low of -0.45%. In UK, the 10-year Gilt yield fell more than 9 basis points to a record low of 1.295%. The competitive devaluation took an ugly turn after the BOJ surprised markets by pushing rates into negative territory earlier this month. Since then markets have been speculating about similar moves by other major central banks. Sweden’s central bank caught markets off guard by cutting repo rate to -0.50% from -0.35%. For more information, read our latest forex news.