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Cœuré on ECB reinvestments

At the end of last year, the European Central Bank stopped its net purchases of government bonds, though it pledged to carry on reinvesting maturing debt. You might, naively, have expected this to increase yields in the eurozone.Nearly six months on, they're at their lowest levels ever. As in, of all time.The German 10-year Bund yield is today at -0.27 per cent. Movement in the periphery is even more extreme. The equivalent Portuguese bonds are now yielding 0.6 per cent, whereas before Feburary, they had never dropped below 1.5 per cent.What's going on? Of course, not everything is caused by the ECB. But Benoît Cœuré, one of the outside tips for next president of the central bank, had some insights in a speech this week. The topic was the effects of the reinvestments the ECB makes when its

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At the end of last year, the European Central Bank stopped its net purchases of government...

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