Negative bond yields aiding QE

Analysts from JP Morgan say that the ECB’s Qe programme is having a greater impact than expected due to the banks willingness to purchase bonds at negative yields.

“Should the ECB continue with the aggressive buying, which reached €9.8 billion euros in the first three days of QE, the total programme would amount to €70 billion monthly”

“It appears that ECB’s QE policy is having a greater impact than was experienced in other regions (Japan, UK, US), in that it is willing to buy bonds at negative yields, and psychologically for investors, there is not much difference between having very little cash that doesn’t generate much profit and holding bonds that are costing you money.”

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