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Bloomberg/John Ainger
“The ECB, which added 500 billion euros ($606 billion) to its pandemic bond buying program Thursday, is set to own around 43% of Germany’s sovereign bond market by the end of next year and around two-fifths of Italian notes, according to Bloomberg Intelligence. That’s up from around 30% and 25% respectively at the end of 2019.”
USAGOLD note: What happens if we end up with a situation where central banks own the bulk of the world’s bond markets? One of the interesting points made in this article is that Japan’s fixed income market is “so dead that sometimes not a single government bond trades in a day.” Such is perhaps the real elephant in the central banks’ meeting room …… “For market professionals,” writes Ainger, ‘there is a feeling that bond trading changed forever in 2020, and not for the better.”
Repost from 12-11-2020
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