The total and utter farce of European sovereign bond yields continues to accelerate on yet another round of rhetoric designed to entice yet more domestic financial institutions to monetize yet more domestic sovereign debt on to their delapidated deflation-devastated balance sheets and 'swap' with the ECB for freshly printed liquidity. As Central Bank front-runners, front-run each other in a race to the bottom, the rapidly Japan-ized EU bond market has seen risk (spread 10-20bps lower) tumbles and yields crash to new record lows this morning. EU bond yields have fallen for 3 years and the economy has cratered... so what is the purpose of ECB QE?
You have to laugh really...
[4]
As risk collapses too... (but note that in Draghi's mind risk premia have a long way to go so Sov QE makes sense!!??!!)
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Meanwhile...
- *GERMAN 10-YEAR BOND YIELD FALLS TO RECORD-LOW 0.534%
Charts: Bloomberg
