While the 2018 football World Cup is still in the early stages, we have already been holding our own multi-asset tournament, in which the 32 competing nations battle for goals on several economic and financial criteria. Which teams will go far, scoring goals on economic excellence, and which ones will flunk at the final financial whistle?
Until the European Central Bank (ECB) changes the rules associated with sovereign bond purchases, the duration of its holdings will steadily increase. This introduces a self-reinforcing dynamic. When yields drop, the ECB is forced to buy more, putting further downward pressure on yields.
In a post last year (Double Dutch), I wrote about the changes being made to pension fund regulation in the Netherlands. While some people put this topic in the same category as "watching paint dry", it does have important implications for how we think about fixed income markets in Europe.