ECB QE: A numbers game - TDS

Pooja Kumra, European Rates Strategist at TDS, notes that the ECB has provided us with a clear roadmap to the end of its Asset Purchase Programme (APP).

Key Quotes

“In absolute term, we still think that the taper in net asset purchases in Q4 18 is likely to have a small impact on the rates side. This is because of very favorable net EGB Issuance (Gross supply-Principal redemption-Net buying) in H2 18.”

“Even after the end of QE in December, we believe that Bunds will continue to enjoy some form of scarcity premium.”

“Meanwhile, the QE scarcity premium should be less visible in Supras as compared to AAA German/Dutch paper.”