Government bonds

Bill Gross' $240bn Pimco Total Return fund has fallen behind 92% of his bond manager peers in terms of calendar year performance.

Yields on short-dated German government bonds turned negative this week as bondholders paid to lend to the country, despite a dismal auction of 10-year bonds on Wednesday.

So suddenly no-one wants to lend to Germany for the next ten years - hardly surprising because by lending to Germany investors are effectively lending money to Greece, Portugal and even Italy.

Fears over the European debt crisis have escalated as a €6bn German bund auction fell flat today, showing investors are now demanding even higher compensation from an asset class previously seen as a safe haven.

EUROPE ON THE BRINK

Swiss bonds were returning a negative yield during trading today as the country's government sold 6 month paper at -0.148%.

ON BONDS

Fidelity Worldwide Investments has launched an Emerging Markets Inflation Linked Bond fund for Andrew Weir.

Spain became the new Italy this morning after the yield on bonds it sold at auction reached a 14-year-high of just under 7%.

Italy sold €3bn of five-year bonds, the maximum target, at the highest yield in more than 14 years as Mario Monti seeks to form a new government.