FRANKFUR: Euro zone bond yields slumped on Friday and Germany’s entire yield curve fell into negative territory for the first time since August after Austria announced it would become the first country in western Europe to reimpose a full COVID-19 lockdown, The market anguish was exacerbated by speculation Germany could follow suit.

Germany’s coronavirus situation is so grave that a lockdown, including for people who have been vaccinated, cannot be ruled out, Health Minister Jens Spahn said on Friday. Europe has become the epicentre of the pandemic again in recent weeks. Markets, which had been relatively calm now have to weigh the impact additional measures may have. “It’s just building, that story of the pandemic not being quite over in Europe and that’s a knee-jerk flight to quality.