German 10-year yields are down 4 bps to a record low 0.898%. They started the year at 1.96% and earlier in the month I wrote that the march was unstoppable.
Breakevens are collapsing and that’s a measure of deflation risk the ECB takes very seriously. The market is beginning to pile into bets on ECB QE next week or some other extraordinary move.
Only 40 basis points to go to match Japanese 10s.
German 10s vs Japanese 10s (spread)
