vendredi 2 janvier 2015
Europe’s Bond Gains Send Yields to Record Low on Draghi QE Bets
Posted on 11:07 by nice news
European Central Bank President Mario Draghi inspired a surge in European bonds that sent yields across the region to record lows and pushed Germany’s five-year borrowing costs below zero for the first time.
From Belgium and France to Portugal and Ireland, 10-year yields reached new lows after Draghi was quoted by German newspaper Handelsblatt as saying he can’t exclude the risk of deflation, fueling bets officials will soon start buying sovereign debt. With the rally extending, investors are demanding the lowest yield premium to hold Spanish securities instead of benchmark German bunds since 2010.
“The market’s verdict right now seems to be that Draghi’s ECB will act swiftly,” said Christoph Rieger, head of fixed-rate strategy at Commerzbank AG in Frankfurt. “If that is the case spreads can compress further and we stick with our strategic overweight of the peripheral countries. The bund yield lows are ahead of us even though we’ve just seen new lows over the past few days.”
From Belgium and France to Portugal and Ireland, 10-year yields reached new lows after Draghi was quoted by German newspaper Handelsblatt as saying he can’t exclude the risk of deflation, fueling bets officials will soon start buying sovereign debt. With the rally extending, investors are demanding the lowest yield premium to hold Spanish securities instead of benchmark German bunds since 2010.
“The market’s verdict right now seems to be that Draghi’s ECB will act swiftly,” said Christoph Rieger, head of fixed-rate strategy at Commerzbank AG in Frankfurt. “If that is the case spreads can compress further and we stick with our strategic overweight of the peripheral countries. The bund yield lows are ahead of us even though we’ve just seen new lows over the past few days.”
Europe’s Bond Gains Send Yields to Record Low on Draghi QE Bets
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