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Europe’s Bond Selloff Is Taking the Urgency Out of Boosting QE

  • Increase in yields makes more bonds eligible for ECB purchase
  • German two-, 30-year spread reaches most since Brexit vote

By disappointing bond investors this month, Mario Draghi has bought himself some time on quantitative easing.

The selloff since the European Central Bank president failed to signal an extension of the bond-buying plan on Sept. 8 has reduced the proportion of German sovereign debt yielding less than the institution’s deposit rate to 60 percent, from about two thirds in late August. Since the ECB is prohibited from buying securities below this threshold, the prospect of it running out of bonds to purchase has receded, data compiled by Bloomberg show.