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European Bond Yields Are Surging - Draghi, We're Gonna Need A Bigger Bazooka
Despite a good start, since early March when The ECB began its bond-buying bonanza, things have not been going the way Mario Draghi had hoped. While inflation data inflected modestly higher (cough oil cough), European bond yields (and peripheral bond spreads) have widened notably. Whether this is "sell the news" trading, Gross-Gundlach-driven unwinds, or Greek "serious disappointment" contagion (Greek 10Y bond yields are up over 200bps from the announcement in January of ECB QE) is unclear... but what is clear is that if ECB bond-buying is not pressuring yields lower then how can they hope to contain real Grexit contagion?
Since ECB QE announcement in Jan...
Since ECB QE began buying in March...
...Or was this the plan all along. Given the exhaustion of eligible securities that we have detailed, this 'modest' sell-off enables Draghi to spread his printed money across a wider range of bonds.
But for now - EU Peripheral bond risk is exploding...
And European Stocks are not having a great day - Greece down most in 3 months...
Charts: Bloomberg
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Didn't we hear this in 2009, 2011, 2013...?
LOL!
I might be interested in getting me some if I had any desire for Euro toilet paper.
I wish I could post the "buy all the things meme" here in the comments. It seems appropriate.
For those who believe in the mythical creature called a "free-market"...be afraid.
For those who believe advanced economies are slaves to CB'ing and will be destroyed following Japan's example of zirp4eva...be bullish on statist orchestration of asset prices and be economically and socially afraid.
The exponential function wants more debt/credit to service existing debt. Print or we'll see a deflationary collapse. Option b is to print to hyper inflation.
"Print or we'll see a deflationary collapse" -- in paper bullshit and anything not required for a high standard of living, yes. In things that are required for a decent standard of living, not so much. In order to see deflation in the latter (especially relative to wages) you will need to deflate the human population significantly.
Agreed , however the bullshit is tied to savings , iras 401ks ...
Screw deflationary collapse, go for civilizational collapse. I hate what's going to happen, but at this point humanity deserves what it's going to get.....
Print faster you squid bitch!
shocking development: banks front run buying bonds ahead of ECB. and then sell bonds to ECB for enormous gains. the only time bond yields have gone up in the US in the last 6+ years is during QE. QE is synonmous for handing bankers free money/profits.
Root for the bread lines, collapse Now, MOAR misery, war, poverty, hate, racial enmity, ethnic cleansing, Muzzies laying down with Christians, disease, famine, unintended consequences
Welcome to Dystopia.... the Happiest place on Earth
long nail guns and building ledges!
Things are getting swirly ... in a hurry
following trade data this morning JPM has cut Q1 GDP to -0.5% from +0.2%
Atlanta FR GDP nowcast has Q2 tracking at +0.8%
Gas prices shooting up
Interest rates rising ... just as spring home selling season hits high gear
Lake Mead dropping like a stone ... read somewhere if it hits 1075 feet ... mandatory water restrictions.
http://lakemead.water-data.com/
is what it is, moral hazard and the laws of Nature and physics are a real bitch.
gas up almost 20 cents a gallon past 2 weeks ... surely, j6p won't mind/care ...
http://www.eia.gov/dnav/pet/pet_pri_gnd_a_epmr_pte_dpgal_w.htm
30yr Fixed Rate Mortgage up 17 bps past 8 business days ... surely, j6p won't mind/care ...
http://www.mortgagenewsdaily.com/data/30-year-mortgage-rates.aspx
There cannot and will not be a Grexit. If there were to be one the small matter of moral hazard would raise its ugly head. And despite what we are told by the tame and compliant financial press, the spotlight would be shone back on Italy - which would then also be forced out of the game. The Ponzi only stays in place with Greece in the EU. The plan is simply to topple Syriza and to put in place a technocratci government, supported by the government, and presumably run by former employees of GS.
The insiders guide to whether there really will be a Greixit is the Swiss 20 year, and as for now, it is screaming NO.
Other side of the boat mother fuckers http://finviz.com/futures_charts.ashx?t=RB&p=w1
rates seem to go up after a qe announcement. funny that. not funny ha ha, but moar a queer sell the news type reaction.
BTFD
Oil is pulling that inflation rabbit out of the hat (by the balls).
Lower the yield = the higher the level of demand for a sovereign bond.
So if the yield is higher, then it indicates that the level of demand for a sovereign bond is lower.
Remember when Greek 10 year bonds were over 40% back in 2010/2011? They were at 40% because no one was prepared to even consider buying Greek bonds.
7% is the threshold. If yields pass that threshold, it means that there are no buyers interested in purchasing sovereign bonds.
QE in the USA made Treasury yields go up every time. It did this in QE1, QE2, and QE3.
Why should it be different this time?