Market chatter: bonds await ECB’s move

The path and pace of European sovereign bonds, especially peripheral countries’ troubled ones, rose on Wednesday after German central bank’s Jens Weidmann admitted the European Quantitive Easing was not out of question.  Spanish 10-years bonds reached 2005 minimum yields of 3.27%, while Italian public Tresury placed €2.5bn with also a minimum yield of 0.707%. Greek sovereign bonds are the only ones pricing downwards at 6.69%.

The shadow of deflation looming over the euro zone as well as the European Central Bank announcing unconventional measures of monetary policy, namely the launching of a stimulus program would benefit not only sovereign bonds but also corporate ones.

On the other hand, the common currency already considers the possibility of  those extraordinary actions  and thus continues  its depreciation trend against U.S. dollar. It prices at 1,379 against, which means -1% in last six days. The euro will probably go down if there are no negative surprises in the geopolitical front  (the IMF is expected to announce today a €15bn financial rescue for Ukraine.)

Meanwhile, European equities, prices stand upwards, while Spanish Ibex 35 reaches 10,000 benchmark.