The ECB's Impact On The Bond Market In One Chart

Earlier today, the ECB updated the list of corporate bonds it bought in the latest week. While no individual bond purchase amounts were given, the ECB has bought into 980 issuances with a total of €683bn in amount outstanding (from 245 issuing entities). For the week ending 21st Jul, bond purchases stood at €0.7bn across sectors, bringing total Corporate Sector Purchase Program holdings to €101.1 Billion, an increase of €720MM in the past week. The complete list of ISINs can be found here courtesy of UBS. According to Dealogic, for week ending 21st Jul, €8.8bn was issued in EUR IG space, of which €3.2bn was CSPP eligible. In the month of Jun, the central bank purchased €7bn of corporate bonds, versus €7.6bn in May. 85.6% of the €96.6bn total CSPP holdings were purchased on the secondary market.

Looking only at the CSPP, As Bloomberg adds, the ECB purchased at least 1 new corporate bond under its CSPP program during the week ended July 21. The number of securities currently held is 978; the ECB holds EU101.06BN of EU682.55bBN outstanding. Utilities remain the largest industry group with 258 securities. Additionally, the ECB bought a bond issued by Lietuvos Energija, its first Lithuanian bond.  Of note, 144 (~14.7%) of the 978 securities are negative yielding.

All of the above is the same dry, weekly update we disclose weekly. However, for the simplest visual summary of just how the ECB's corporate bond purchases - now that the central bank owns 14.8% of all eligible European corporate bonds - have "impacted" the market since the corporate bond buying program was announced in March of 2016, here is just one chart from JPM:


hooligan2009 Mon, 07/24/2017 - 14:46 Permalink

so... the ECB sets the corporate default rate across all time periods.those charts indicate that there is a marked decrease in the cumulative probability of default for european borrowers.this breaches WTO rules on price discovery in open markets and is akin to the ECB setting the price at which used cars, houses or holidays are the meanwhile, pay day loans continue to be offered at rates between 50% and 1,200%, credit card debt continues to charged at 18% and more importantly RETAIL FX RATES ON TOURIST CURRENCY CONTINUES TO BE CHARGED AT BETWEEN 2% AND 10% on price spread and commission.the ECB is paying for free lunches at the corporates it lends money to.criminal, immoral and unethical behavior that is symptomatic of the failed dogma of QE and implemented by staff that would not be hired onto any prop desk (unless they got tips from central banks).here is themonetary policy dance (again).