Economics
What ECB Hikes? Bond Traders Look Past Bets for Tighter Policy
- Lagarde could signal QE for much of next year, Santander says
- Steady peripheral spreads shows market unfazed by rate pricing
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Investors in some of the euro area’s riskiest bond markets appear impervious to wagers calling for higher rates, betting the European Central Bank will push back against the positioning.
Over the past five months, the market has pulled forward the expected timing of the ECB’s first 10-basis-point increase by a full year, to the end of 2022. Yet the extra yield traders demand to own 10-year Italian securities over equivalent German paper has hardly budged since then.