Five factors have driven a relentless bid into bunds from 2% at the start of the year.
- Dovish ECB
- Low eurozone inflation
- Safe haven demand due to geopolitical risks
- The narrowing periphery spreads trade unwinding because of ultra-low Italian/Spain yields
- Risk aversion and the beating in the DAX lately (-10% since July 4)
That last factor is the new one and Draghi talked about buying sovereign bonds today as well. Technically, the break below 1.12% opens the way to 1.00%.
German 10 year bund yields
