Germany's 10-year bond yield rose above 0% for the first time since 2019 on Wednesday, marking a potential turning point for euro area debt characterized for years by negative yields thanks to copious central bank support fighting deflationary forces.

The 10-year yield note, considered a benchmark for the whole eurozone, rose as high as 0.009%, up 2 basis points (bps) on the day.

Gareth Hill, fund manager at Royal London Asset Management, called the move above zero a "very key level," seeing it as a reflection of policy tightening by the European Central Bank (ECB).

"Pushing through that zero barrier is indicative really of the path of things to come with higher yields across the board."

The rise in German yields reflects record-high inflation in the euro area and an economy recovering from the COVID-19 pandemic that is allowing the ECB to pare back monetary stimulus that has depressed the bloc's bond yields for years.

The immediate move above 0% comes as eurozone bond markets pulled forward their bets on a 10 basis-point rate hike from the ECB to September, and are betting on a second rate hike by December.

Traders have ramped up their rate hike bets mirroring moves in the United States, where investors bet the U.S. Federal Reserve could hike rates as early as March and another three times by the end of the year.

Fed policymakers have also signaled they may shrink the bank's $8 trillion-plus balance sheet by offloading bond holdings.

Those concerns have driven eurozone bond yields higher in recent weeks with 10-year German yields rising nearly 40 bps over the last month, tracking U.S. Treasury yields higher.

Unease as the ECB plans to end its pandemic emergency bond purchases in March, which will leave it conducting conventional bond purchases that are less than what some investors had expected, has also driven yields higher.

That is expected to lead to the net supply of bonds issued by eurozone governments outstripping ECB purchases for the first time since 2019.