Periphery short end yields set for further falls

By Craig McGlashan
21 Aug 2014

Spanish and Portuguese short term yields tickled the 0% mark at a pair of auctions this week — but the rally at the front end of the periphery yield curve could have even further to go, said analysts.

Short term periphery yields have tumbled since the ECB cut its deposit rate to minus 0.1% from 0% on June 5, as banks put their excess liquidity into short term government paper rather than be penalised for storing it at the central bank.

That effect, coupled with the ...

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