HALISTER1: ECB May Follow BOJ’s Path of Steepening Yield Curve: Union Bank

ECB May Follow BOJ’s Path of Steepening Yield Curve: Union Bank

(Bloomberg) -- ECB may want to steepen yield curve like BOJ is trying to do rather than simply tapering bond purchases, says Kuniyuki Hirai, head of trading at MUFG Union Bank.
  • ECB could shorten durations of bonds that it buys to steepen the curve, New York-based Hirai says in interview; a flatter yield curve will pressure earnings of European banks even further
  • ECB could cut interest rates further while shortening duration; if it does, then EUR won’t be bought much
  • NOTE: ECB will probably gradually wind down bond purchases before conclusion of quantitative easing, according to euro- zone central-bank officials
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Kuniyuki Hirai (Bank of Tokyo-Mitsubishi UFJ Ltd/The)

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