Upheaval in eurozone debt markets has left benchmark German borrowing costs on the cusp of climbing above zero for the first time in nearly three years, in a sign that investors believe major central banks are close to withdrawing their pandemic-era stimulus.

The country’s 10-year bond yield climbed to minus 0.03 per cent last week, its highest level since May 2019, as a global drop in government debt prices spread to the most important reference point in European markets. Midway through last month, the gauge stood as low as minus 0.4 per cent.

The rapid pick-up in yields, led by the US, reflects growing confidence among investors that the Omicron variant will fail to derail the global economic recovery, potentially enabling central banks to dial back purchases and bump up interest rates.