by Mike ‘Mish’ Shedlock
ECB rules say QE bond purchases must be weighted according to size of the economy. That means German bonds are the preferred issue.
The rules also stipulate a floor interest rate of -0.4%. Most German bonds trade below that figure.
Expect a rule change because the ECB wants to continue its ridiculous and counterproductive QE program.
Please consider The ECB Could Soon Run Out of Bunds to Buy.