Back
20 Apr 2015
Yields in the euro area: lower for longer – Danske Bank
FXStreet (Edinburgh) - Analysts at Danske Bank reviewed the current performance of the yields in the euro zone.
Key Quotes
“European government bond yields have continued to fall as the ECB purchase programme continues unabated”.
“The programme has already pushed the average German yield below zero and German bonds with a maturity up to nine years are now trading in negative territory and bonds with a maturity up to five years are trading with a negative yield below 20bp, which is the threshold level for ECB buying”.
“We believe the trend for lower EUR rates and yields will continue for the rest of 2015, albeit at a somewhat slower pace than seen so far in 2015”.
“The ECB has basically created a bond ‘scarcity premium’, which we expect to continue to flatten the curve and we expect new record lows over the next three to six months”.
“We now forecast that 10Y German bond yields will fall to zero, or even below, over the next couple of months”.
“We expect the move lower in EUR yields irrespective of our more positive view on the eurozone economy and inflation outlook”.
Key Quotes
“European government bond yields have continued to fall as the ECB purchase programme continues unabated”.
“The programme has already pushed the average German yield below zero and German bonds with a maturity up to nine years are now trading in negative territory and bonds with a maturity up to five years are trading with a negative yield below 20bp, which is the threshold level for ECB buying”.
“We believe the trend for lower EUR rates and yields will continue for the rest of 2015, albeit at a somewhat slower pace than seen so far in 2015”.
“The ECB has basically created a bond ‘scarcity premium’, which we expect to continue to flatten the curve and we expect new record lows over the next three to six months”.
“We now forecast that 10Y German bond yields will fall to zero, or even below, over the next couple of months”.
“We expect the move lower in EUR yields irrespective of our more positive view on the eurozone economy and inflation outlook”.