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ECB Fast Exhausting German Bonds for QE Buying as Yields Tumble

  • German issuer limits likely hit as early as 1-2 months: UBS
  • More than 60% of nation’s debt yields below eligibility limit
Updated on

The European Central Bank’s bond-buying program will be scrounging for German debt within months, according to two of the region’s banks.

The securities that yield less than the ECB’s minus 0.4 deposit rate have grown to more than 60 percent, based on a $1.13 trillion Bloomberg German bond index. That means they’re ineligible for the purchases. Analysts from UBS Group AG and SEB AB are estimating the central bank may run out of German targets within six months, and as soon as August, unless the rules are broadened.