9 Mar 2015
German yields fall as ECB set to begin bond purchases
FXStreet (Mumbai) - The German Bunds gained, pushing yields on 1-, 2-, 3-, 4-, 5-, and 6-year yields further down into he negative territory after the central banks across the Eurozone were reportedly seen buying German bond under the European Central Bank’s (ECB) QE program.
The anticipation of the EUR 1.1 trillion quantitative-easing plan, which is due to start today, has already pushed the yields across the euro region to record lows. The yield on the 10-year German Bunds fell 5.2 basis points to 0.349%. The 30-year yield fell 5 basis points to 0.901%. Germany’s six-year yield was at -0.036%.
Moreover, the demand for high yielding currencies is on the rise after ECB President Draghi said last week that the bank would not buy bonds with yields below the deposit rate of -0.2%. Thus, we could see more long duration bonds with high yields rise sharply, thereby pushing yields lower to zero or even in negative territory.
The anticipation of the EUR 1.1 trillion quantitative-easing plan, which is due to start today, has already pushed the yields across the euro region to record lows. The yield on the 10-year German Bunds fell 5.2 basis points to 0.349%. The 30-year yield fell 5 basis points to 0.901%. Germany’s six-year yield was at -0.036%.
Moreover, the demand for high yielding currencies is on the rise after ECB President Draghi said last week that the bank would not buy bonds with yields below the deposit rate of -0.2%. Thus, we could see more long duration bonds with high yields rise sharply, thereby pushing yields lower to zero or even in negative territory.