The European Central Bank started buying
government bonds under its expanded quantitative-easing plan
designed to boost price growth in the region.
Central banks bought German and Italian debt, according to
at least two people with knowledge of the transactions, who
asked not to be identified because the information is private.
They also purchased Belgian securities, one of the people said, and a separate person said French notes were being acquired.
Bonds rallied. The yield on Germany’s 10-year bunds fell five basis points, or 0.05 percentage point, to 0.35 percent at 10:30 a.m. London time, approaching the record-low 0.283 percent set on Feb. 26. Italy’s 10-year yield declined three basis points to 1.29 percent.
“The QE purchases are having the expected effect and the
market is very positive,” said Michael Leister, a senior rates
strategist at Commerzbank AG in Frankfurt.
“In the core we’re seeing yields dropping sharply lower led by the ultra-long end so these are very much QE-style moves. Near-term it’s going to stay quite volatile because there are some sellers who did front-run these purchases and now are keen to sell.”
The ECB said in a Twitter post that it had started purchases along with national central banks. The Bundesbank was active in the market from 9:25 a.m. Frankfurt time, a spokesman said by phone.
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| The European Central Bank (ECB) headquarters, right, are illuminated by light as the building stands on the skyline by the River Main in Frankfurt, Germany, on Friday, March 6, 2015. |
They also purchased Belgian securities, one of the people said, and a separate person said French notes were being acquired.
Bonds rallied. The yield on Germany’s 10-year bunds fell five basis points, or 0.05 percentage point, to 0.35 percent at 10:30 a.m. London time, approaching the record-low 0.283 percent set on Feb. 26. Italy’s 10-year yield declined three basis points to 1.29 percent.
“In the core we’re seeing yields dropping sharply lower led by the ultra-long end so these are very much QE-style moves. Near-term it’s going to stay quite volatile because there are some sellers who did front-run these purchases and now are keen to sell.”
The ECB said in a Twitter post that it had started purchases along with national central banks. The Bundesbank was active in the market from 9:25 a.m. Frankfurt time, a spokesman said by phone.
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