European Bond Yield Fall Awaiting ECB QE

Bond yields across Europe continued to slide Thursday as weak inflation data and hints from the Vice President of the European Central Bank (ECB) boosted hopes of a full-blown sovereign bond-buying program.

Bonds from countries on the so-called periphery of the euro zone performed particularly well, with yields on benchmark 10-year bonds from Ireland, Italy and Portugal hitting 10-year lows. France and Germany’s bond yields also slipped.

It comes after ECB Vice President, Vitor Constancio, raised hopes of full-blown quantitative easing – also known as QE – on Wednesday.

He said the central bank expected its balance sheet to rise to 2012 levels on the back of measures already agreed, but added the purchase of sovereign debt and “other assets” could be an option if the environment didn’t develop as expected.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza