According to an article by the Bloomberg agency, European bond investors want the European Central Bank to bring together all the sovereign debt earmarked for the markets in 2021.
Bloomberg flags that the issue of bonds by the Eurozone countries could amount to some 1.25 trillion euros to fight against the negative impact of the pandemic. Additionally, the European Union (EU) is also prepared to be the main issuer to finance the stimulus plan funded by jointly issued debt.
In addition, the article notes that in normal times, such a “flood” of bonds would boost yields, but that most banks are optimistic about the impact. The ECB is expected to more than offset the bond sale through its asset purchase programme. Bloomberg also highlights that the ECB’s bond purchase should contain volatility and limit government borrowing costs.