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“Global bond yields could see upward pressure if net capital outflows from the eurozone start to subside when the ECB ends its quantitative easing (QE) in December 2018,” Fitch Ratings said in a recently published report.

Key quotes

  • The risk is that eurozone net bond outflows could drop away sharply when the ECB QE ends in December 2018, reducing demand for US Treasuries and pushing up US (and global) yields.
  • One factor that could temper such a shock is the ongoing yield advantage of owning US bonds.  
  • While the ECB’s dampening influence on global bond yields is likely to weaken significantly from next year, it is unlikely to go away completely.