Bund Flattening Defying Textbook Highlights ECB Angst: Analysis

Short-end bonds’ room to rally further limited unless QE purchase rules changed

Euro-area disinflationary pressure is getting deeply entrenched. With shorter-end bunds already pricing in further European Central Bank easing, the recent curve flattening shows ineffectiveness of policies in boosting inflation and nominal growth, Bloomberg strategist Tanvir Sandhu writes.

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