FT: Central banks move to ease European dollar crunch
Readers take note. This is a chart of the one-year German note, currently yielding less than zero. An unprecedented event according to Reuters:
So much for the much talked about flight from German bunds?
If anything, this is evidence of German bonds increasing their safe haven status. Especially on the shorter side.
While we may have had negative real yields for some time, yields have not yet gone negative on a nominal basis, a fact which in its own right signifies time depreciation of money in German bond markets.
That’s a situation which only really makes sense if the market is pricing in deflation.
And on that note, we now have coordinated intervention from the world’s key central banks in the swap markets.
