To which extent this decrease in bond yields is associated with changes in short-term or long-term rates becomes more evident when looking at the yield curve defined as the 10-year government bond yield minus the three months Euribor shown in Figure 2. Over the entire year, the slope of the yield curve fell by roughly 20 bp to somewhat less than 130 bp. The same trend is also illustrated by the implied one-year forward rate in nine years, as extracted from the German zero-coupon curve. 20 The rate falls by 10 bp in the course of year, although there are sizeable developments over time. It strongly increases.
