Bond market liquidity and volatility dead because of zero rates?, Watch today’s interview with Marcus Ashworth, Head of Fixed Income for Haitong Securities, as he speaks on the bond market scenario, and why the central bank QE is more about rearranging debt than easing.
US and UK bond market
Ashworth notes how the US bonds did very little across October, while the European bunds saw good action after ECB Draghi’s hints towards further easing.
Ashworth further says how they look at the relative performance between countries, with most liquidity and volatility in the bond markets being drained out. He adds that this remains a serious concern.
ECB and Bundesbank taking bonds out of the market?
Ashworth comments that the central bank QE is only resulting in rearranging of debt rather than having the easing effect on the market. He says how the falling yields have made the Bundesbank sceptical of investing in its own paper.
Peripheral markets
Portugal: The government crisis spells worry?
Italy: Sharp selloff yesterday. Cash flow issues behind the widening spreads?