German 10-year yields fell to near zero for the first time today, a day after the European Central Bank affirmed its commitment to see out its trillion euro asset purchases.
Yields on other top-rated 10-year euro zone government bonds also hit record lows.
They included French equivalents before an auction of up to €8 billion of bonds when Paris is expected to raise five-year money at negative yields.
Usually such huge volumes would push yields higher in secondary markets but concern that the ECB's quantitative easing scheme will hoover up many of the tradeable bonds is subduing yields.
German 10-year yields, the benchmark for euro zone borrowing costs, fell as low as 0.094% while French equivalents were 1.3 basis points down at 0.343%.
Belgian, Austrian, Dutch and Finnish 10-year yields were also at all-time troughs.
France will sell three, four and five-year bonds later in the day as well as €1.5-2 billion of inflation-linked bonds.
Yields on these bonds in the secondary market are already below zero and France is expected to join euro zone peers Germany, Austria and the Netherlands in selling five-year bonds at negative yields, effectively allowing the countries to make a profit by borrowing.
Investors do not mind the negative yields when purchasing the bonds as long as they can later sell them to the ECB for a better price.
Germany moved closer yesterday to raising 10-year money for free, showing investors' willingness to compete for bonds with the ECB.
Meanwhile, Greek two-year yields jumped more than 100 basis points to 24.88% after Standard & Poor's downgraded the country and Germany's finance minister said yesterday there was little chance of the euro zone reaching a deal with cash-strapped Athens next week.
The Greek government and its creditors have said they need to reach at least an outline agreement on economic reforms at an April 24 meeting of euro zone finance ministers. These reforms are needed to unlock much-needed bailout funds.
Ratings agency S&P cut Greece's credit rating deeper into junk yesterday, citing worsening economic conditions due to prolonged negotiations between the country and its lenders.