10 Mar 2015
German yields down again, bond rally as it is – KBC
FXStreet (Barcelona) - The KBC Bank Research Team summarizes the bond market performance, noting that German bonds continued to steam ahead while US treasuries have erased a large part of post-NFP losses, ECB’s QE expected to be the main driver.
Key Quotes
“German bonds and its satellites steamed ahead for the second consecutive session, which was again devoid of key eco data or other headline news. At the time of writing, the German yield curve bull flattened with yields down between 3.3 bps (2‐yrs) to 15 bps at the 30‐year. The latter yields only 0.74%.”
“We are entering absurd levels. While there are no signs the bond rally is over, we suspect that bonds might need some pause to work off overbought conditions.”
“US Treasuries are doing well too and have erased a large part of the postpayrolls losses. We didn’t see specific US reasons, but suspect some overflow from the euro area bonds moves. US Treasury curve bull flattened too with yields down between 1.5 bps at the 2‐year to 6.7 bps at the 30‐year.”
“It seems that ECB bond purchases are still the main driver, but as equities were hit too, one cannot exclude some positive impact from sagging equities, even if we would qualify the equity decline more as a profit taking move following a breathtaking rally (especially in Europe).”
Key Quotes
“German bonds and its satellites steamed ahead for the second consecutive session, which was again devoid of key eco data or other headline news. At the time of writing, the German yield curve bull flattened with yields down between 3.3 bps (2‐yrs) to 15 bps at the 30‐year. The latter yields only 0.74%.”
“We are entering absurd levels. While there are no signs the bond rally is over, we suspect that bonds might need some pause to work off overbought conditions.”
“US Treasuries are doing well too and have erased a large part of the postpayrolls losses. We didn’t see specific US reasons, but suspect some overflow from the euro area bonds moves. US Treasury curve bull flattened too with yields down between 1.5 bps at the 2‐year to 6.7 bps at the 30‐year.”
“It seems that ECB bond purchases are still the main driver, but as equities were hit too, one cannot exclude some positive impact from sagging equities, even if we would qualify the equity decline more as a profit taking move following a breathtaking rally (especially in Europe).”