Euro Zone bonds rally as additional ECB buying to kick off tomorrow

Bonds across globe are parting since last night after FED chair Janet Yellen indicated that she is a dove and will be advocating for cautious approach towards rate hike, at a time when financial market volatilities are higher and global economy is relatively weaker.

Yesterday’s rally is extending further today over optimism that central bank stimulus are here to stay for much longer. Moreover there is another factor at play here, especially in Euro Zone. European Central Bank (ECB) will be additionally purchasing €20 billion bonds in addition to its existing €60 billion from tomorrow.

Euro Zone bonds are having extra glasses of drinks. Best performer are below –

• Belgium 5 year bond yield is down 3%, trading at -0.27%
• Austria’s 7 year bond yield is down -11%, sinking further into negative currently -0.05%.
• Yield in Finnish 8 year is down more than 5%, trading at +0.05%
• French 8 year yield is down 3%, trading at +0.06%
• Italy’s one year yield has now dipped into negative from yesterday’s positive.

Germany is relatively worse performer, where 10 year yield has dropped just 0.7%, trading at 0.14%.

Euro on the other hand is up 0.3% against Dollar, trading at 1.132.