Robeco: QE-Effekt der EZB stärker als erwartet

The ECB started buying last Monday, with very strong bond returns as a result. 10-year Bund yields nearly halved in a few days’ time, with peripheral bonds keeping pace (short-dated bonds) or even outperforming (long-dated bonds) German bonds. Portuguese bonds have returned 7.9% this year, Italian bonds 6.4%, Spanish bonds 4.4% and Irish bonds 3.1%.

European Central Bank

Executive Board member Benoit Coeuré indicated EUR 9.8 billion of public sector debt has been bought in the first three days, with an average maturity of 9 years. He noted the possible scarcity of long bonds would potentially help maximize the impact of the ECB’s buying operations.

Issuance

Last Thursday Italy, Spain and Ireland issued bonds, with both Italy and Ireland issuing 30-year maturities. It is very rare for all three countries to come to the market on the same day. Despite the large issuance (EUR 13bn) and long maturities, investors were eager to take up this amount.

Spain

Spanish debt reached EUR 1,000 billion at the end of 2014. It is expected to exceed 100% of GDP in 2015. The average maturity of debt issued by Spain in 2015 is more than 11 years so far. This shows that peripheral countries are using the opportunity to extend the maturity of their debt.

Greece

Greek bond yields rose on renewed tensions with Germany and the EU over the required reforms. Prime Minister Alexis Tsipras signed an agreement with the OECD to jointly develop a reform package. Although Greek cash buffers are running low, Greece repaid the IMF as scheduled. So far this month EUR 658 million has been paid; another EUR 842 million is still due in the remainder of the month.

Robeco Euro Government Bonds

We remain positive on peripheral bond markets as fundamentals are improving and the ECB has clearly shown its determination to do ‘whatever it takes’. Peripheral bonds remain attractive in this environment. The fund has a preference for longer-dated peripheral bonds. This week we slightly increased our positions in long-dated Italy and Spain, as this segment will likely benefit most from further ECB buying.

Die vollständige Analyse im pdf-Dokument