QE helped smooth sovereign bond yields, ECB paper finds

Eurosystem’s asset purchases helped reduce effect of “auction cycle”, researcher says

ECB - JULY 2018 - Getty - web.jpg

Sovereign bond purchases by Eurosystem central banks under the quantitative easing programme helped smooth out yields, a working paper published by the European Central Bank finds.

In Central bank asset purchases and auction cycles revisited: new evidence from the euro area, Federico Maria Ferrara notes that studies of sovereign bond markets describe an “auction cycle”. Government bond yields rise as an auction approaches, then fall back to their earlier level afterwards.

Ferrara uses data from

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