The ECB Could Soon Run Out of Bunds to Buy
Negative interest rates are suppressing yields on German government bonds, pushing many outside the scope of the ECB's asset purchase program
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The European Central Bank's haul of bonds passed a trillion euros this month. A second trillion may be harder to come by.
The ECB could run out of German government bonds to buy as soon as October, according to Citigroup Inc.'s Harvinder Sian. That's a problem because the bonds of eurozone governments form the largest component of the asset purchase plan it's designed to stimulate lending and boost inflation — and bunds in turn make up the largest share of those sovereign debt purchases. The program is set to run until at least March 2017 at a pace of about 80 billion euros ($90 billion) per month.