Bunds in QE ‘Black Hole’ Defy Gross’s Short of a Lifetime

Bill Gross’s pronouncement that German bonds are the “short of a lifetime” is coming up against a more powerful force in the form of Mario Draghi’s asset-purchase program.

For now, strategists see that trade limited by the European Central Bank president. A Bloomberg survey forecasts 10-year bund yields rising no more than 0.4 percentage point from their Tuesday close to half a percentage point by year end -- where they were three months ago. Two-year yields are seen staying below zero through at least the third quarter of 2016. That’s when the ECB is scheduled to finish its 1.1 trillion-euro ($1.2 trillion) quantitative-easing program that’s depressed yields from Germany to Portugal.