vendredi 10 avril 2015
It’s ECB Versus Investors as Bond Scarcity Pushes Yields Lower
Posted on 10:22 by nice news
Germany’s government bonds extended an advance that pushed yields to record lows as investors rushed to compete with demand from the European Central Bank’s debt-purchase program.
German four-year yields fell this week to less than the ECB’s minus 0.2 percent deposit rate, meaning they no longer qualify for purchase by the central bank. Around 20 percent of otherwise eligible German securities now yield less than that threshold, Christoph Rieger, head of fixed-rate strategy at Commerzbank AG in Frankfurt, wrote in a report. That’s making longer-dated German debt even more scarce, helping to send the eight-year yield below zero on Thursday.
“There’s considerable excess demand to come from the ECB and you see yields drifting lower almost day-by-day now,” Axel Botte, a fixed-income strategist at Natixis in Paris, said in an interview on Thursday. “Having 10-year bund yields negative by the end of the year -- that’s certainly a scenario we wouldn’t bet against.”
Germany’s 10-year yield was little changed at 0.16 percent as of 4:24 p.m. London time. That’s down four basis points, or 0.04 percentage point, this week. The yield touched 0.139 percent on Thursday, the lowest level since Bloomberg began compiling the data in 1989. The price of the 0.5 p
German four-year yields fell this week to less than the ECB’s minus 0.2 percent deposit rate, meaning they no longer qualify for purchase by the central bank. Around 20 percent of otherwise eligible German securities now yield less than that threshold, Christoph Rieger, head of fixed-rate strategy at Commerzbank AG in Frankfurt, wrote in a report. That’s making longer-dated German debt even more scarce, helping to send the eight-year yield below zero on Thursday.
“There’s considerable excess demand to come from the ECB and you see yields drifting lower almost day-by-day now,” Axel Botte, a fixed-income strategist at Natixis in Paris, said in an interview on Thursday. “Having 10-year bund yields negative by the end of the year -- that’s certainly a scenario we wouldn’t bet against.”
Germany’s 10-year yield was little changed at 0.16 percent as of 4:24 p.m. London time. That’s down four basis points, or 0.04 percentage point, this week. The yield touched 0.139 percent on Thursday, the lowest level since Bloomberg began compiling the data in 1989. The price of the 0.5 p
It’s ECB Versus Investors as Bond Scarcity Pushes Yields Lower
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