The 5Y German bond yield is now negative: 2015 has just started and yet we have already had a wonderful evidence of the fact that the ECB is not acting as a central bank
In case you’ve missed it, 2014 was the year in which ECB passed from: “We won’t have deflation, deflation must be avoided” to “Err… deflation is coming, but come on it’s not that bad let’s just promise we will do more in the future like we always do”.
We’re sorry for Draghi & Co., but this is not going to work in 2015:
The 5Y German bond hit a negative yield for the first time EVER.
It basically means that markets do now expect the Euro Area to recover in the next 5 years, we are eager to listen to Draghi’s fairytales.
And when will we see the 10Y Bund hit a negative yield ? At the moment we are at 0.5%, we’re not that far.