Marcus Ashworth, Columnist

Le Spread, Meet Die Bundesbank

Schatz shortage has little hope of ending.

February 24, 2017 at 11:39 AM UTC

Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. Previously, he was chief markets strategist for Haitong Securities in London.

Provide news feedback or report an error

Site feedback:

Take our Survey

This article is for subscribers only.

For a brief halcyon moment on Thursday the confluence of a political bromance at the center ground of French presidential candidates and charges that a top aide to Marine Le Pen misused public funds produced a sharp contraction to the ever-widening spread between French and German government bonds. Frankfurt's putting the pressure back on, and it's probably going to stay there.

The Bundesbank has finally unfriended quantitative easing. President Jens Weidmann informed us Thursday that he didn't support extending the European Central Bank's Public Sector Purchasing Program in December. And the Bundesbank has made a point of raising provisions for expected losses once the ECB starts raising interest rates. With friends like these, Mario Draghi must be feeling lonely.