Draghi Did It Again
Jeroen Blokland | Jun 19, 2019 11:03
As mentioned in Monday’s sketch, it wouldn’t be the first time Mario Draghi surprises markets at the ECB Forum in Sintra. And yesterday he did it again. In another ultra-dovish speech, Draghi said that the ECB will now act if circumstances do not improve. He also strongly emphasized that cutting rates is definitely an option to counter the downward trend in inflation expectations.
As a result, yields in the Eurozone and the rest of the world collapsed. In Austria, France and Sweden, the 10-year bond yield fell below 0% from the first time ever.
The total amount of negative-yielding debt also reached a new record, making it another historical day for bond markets. Next up is the Fed.
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