U.S. Markets closed

Negative-yielding euro govt debt pool rises to 3.7 trillion euros in May, 48% of total-Tradeweb

LONDON, May 31 (Reuters) - The pool of euro zone government bonds with negative yields increased in May to 3.71 trillion euros or around 48% of the total, the highest proportion since September 2016, Tradeweb data shows.

Bond yields across major developed markets have plunged this year as weak data, trade tensions and a dovish policy stance from major central banks boost demand for fixed income.

Accordingly, of around the 7.69 trillion euros ($8.57 trillion) of euro area government bonds in the Tradeweb system, the proportion of debt yielding less than zero rose sharply in May, Tradeweb data as of the close of trade on Thursday showed.

It is up from 3.44 trillion euros or roughly 45% in April. It is the largest share since 2016, when deflation risks and global growth worries last drove bond yields in the bloc deeply negative.

Tradeweb data also showed almost 29% of euro zone government bonds -- some 2.2 trillion euros worth -- now yield less than the ECB's deposit rate of minus 0.40 percent, the highest since December 2016. The proportion was 25% at the end of April.

(Reporting by Dhara Ranasinghe; Editing by Sujata Rao)