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debt, Europe, growth

ECB QE and bond yields / Il QE della BCE e i rendimenti dei bond

Stefano Fugazzi (ABC Economics) – The ECB’s asset purchases programme, also known as QE, has contributed to lower government bond yields in most euro-area countries (please refer to Table 1.B which was sourced from Bank of England’s latest inflation report ).

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 Although yields rose slightly in recent weeks, they remain well below their levels of six months ago, close to historical lows (Chart 1.3).

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In contrast to yields in other euro-area countries, Greek government bond yields are substantially higher than six months ago, reflecting both the exclusion of Greece from the QE programme and increased concerns about how discussions between the Greek government and its creditors will be resolved.

Another way in which asset purchases should support euro-area growth is through investors reallocating their portfolios away from government bonds towards other riskier euro-denominated assets.

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