EU Core yields extend the decline – Danske Bank

FXStreet (Edinburgh) - Signe Roed-Frederiksen, Senior Analyst at Danske Bank, assessed the recent performance of the debt markets in the euro area.

Key Quotes

“The rally in the core continues with Germany hitting new lows across the curve”.

“The average German yield (market weighted) has dropped to -5bp and we only have 4 Bunds left sub 10Y that still yield positive”.

“ECB Governing Council member Hansson (Estonia) made some interesting comments late yesterday on the possibility to expand the PSPP programme to corporate debt –‘in a second stage during the coming months’”.

“So even though Draghi labelled the scarcity discussion as premature, Hansson made it clear that the relevance is acknowledged”.

“Greek concerns are weighing on the periphery, although it does not look like there is a real deadline before the 12 May IMF repayment”.

“This is an ongoing saga and we are bit surprised about the magnitude of the contagion taking into account the ongoing ECB buying”.