If Europe’s economy remains in crisis, then someone please tell the bond markets. The ECB’s asset purchase programme has driven half of the EU’s sovereign debt pile into negative yield territory. And central bank president Mario Draghi’s plan has only just started. Funds see little choice but to follow the QE monster on its path of destruction through the yield curve. Will that lead to the surreal outcome of all EU sovereigns yielding the same, regardless of credit quality?
The ECB goes for broke February 2015 The eurozone’s economic fortunes should start to recover with the arrival, at last, of full-blown quantitative easing. As the world’s leading currencies are set for a race to the bottom, it could be time to buy gold.
QE this year is inevitable July 2014 ECB president Mario Draghi has resisted using his quantitative easing bazooka up to now. However, with inflation expectations already moving lower, he will have to fire it before the year is out.
Time for ECB action June 2014 There is no time to waste for intervention to overcome persistently low inflation in the eurozone.
Europe deflates; time for QE May 2014 The ECB view that eurozone disinflation is slowly reversing is unconvincing. QE might be the only strategy left, although it is not risk free.