European Central Bank Smothers Government Bond Market

The European Central Bank is vacuuming up sovereign bonds faster than governments can pump them out, keeping a tight lid on borrowing costs as the region spends on coronavirus relief measures. The strong appetite from the ECB has kept yields on government debt in the region pinned extremely low. On Friday, yields on benchmark 10-year German bunds edged down to minus 0.467% from minus 0.427% on Thursday. But the real beneficiaries have been Europe’s riskier borrowers. Italy’s 10-year bond yield has stayed close to 1% since…


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