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Euro Area Central Bank Buying Crushes Yield Curves

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Euro-area government bonds with longer maturities surged as the region’s central banks bought sovereign debt for a second day, pushing yields closer to those on shorter-dated notes.

That’s flattening so-called the yield curves of debt from Germany to Italy. Euro-system central banks were said to have purchased securities, including German five-year notes with a negative yield, under the European Central Bank’s expanded quantitative-easing plan, according to three people with knowledge of the transactions. Belgian and Italian securities were also acquired, one of the people said. An ECB spokesman declined to comment.