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11 Mar 2015
European yields expected to fall further – Danske Bank
FXStreet (Edinburgh) - Senior Analyst at Danske Bank Pernille Nielsen assessed the European debt markets following the start of the ECB’s QE on Monday.
Key Quotes
“Even though the ECB purchases are still in their very beginning, the start of the ECB QE programme has surely driven the markets this week”.
“Core yields have broken their recent ranges on the downside and closed yesterday at all-time lows (e.g. across the German curve), not least as also poor risk sentiment in global equity markets added to the downward pressure on yields”.
“The movements in rate markets, however, is in our view mostly driven by investor expectations rather than the ECB bidding aggressively, as the ECB seems very focused on creating as little distortion as possible”.
“We have been a bit surprised by the strength of the QE price action from the actual purchases (we would have expected most price action to have taken place in anticipation of/at the announcement), but one must respect the flow and in absence of any particular data releases it is likely to continue today”.
Key Quotes
“Even though the ECB purchases are still in their very beginning, the start of the ECB QE programme has surely driven the markets this week”.
“Core yields have broken their recent ranges on the downside and closed yesterday at all-time lows (e.g. across the German curve), not least as also poor risk sentiment in global equity markets added to the downward pressure on yields”.
“The movements in rate markets, however, is in our view mostly driven by investor expectations rather than the ECB bidding aggressively, as the ECB seems very focused on creating as little distortion as possible”.
“We have been a bit surprised by the strength of the QE price action from the actual purchases (we would have expected most price action to have taken place in anticipation of/at the announcement), but one must respect the flow and in absence of any particular data releases it is likely to continue today”.