How Long Will It Take for the ECB to Own All Sovereign Debt of Spain, Germany, France?
At the current rate of purchase of sovereign bonds the ECB will have have purchased all sovereign debt issued by Spain in 9 years and Germany in 8.8 years.
Bond Market Distortion
Distortion in the corporate bond market has picked up since the ECB has started buying corporate bonds. The above chart shows a comparison between the yields of bonds eligible to be purchased by the ECB and bonds with the same rating in the same sector that are not eligible for the ECB.
Corporate bond yields have collapsed across the board since the ECB’s announcement, but even more so for eligible bonds.
Also consider …
- When Will the Bank of Japan Own 100% of Japanese ETFs?
- Banks Ponder Vault Cash in Response to Negative Rates: Lending Reality in a Nutshell
- Is the EU Volcano About to Erupt?
- Spirit of Abenomics: Bold New Plan in September?
Mike “Mish” Shedlock