The European Central Bank’s President, Mario Draghi, 8-year term is up in October … and Christine Lagarde of the International Monetary Fund has been chosen to replace him. Will Lagarde continue Draghi’s policies (yes) or change course (no)?
But Europe has been invaded by the bizarro legion.
Case in point. Both Germany and Denmark have negative sovereign yields out to 20 years. Germany, which has issued longer maturity sovereign debt, has slightly positive yields beyond 20 years.
And the German 10-year Bund yield is now below the ECB Main Refinancing Rate, ECB Deposit rate and the European Financial Stability Facility (EFSF) rate. How bizarre is that?
Yes, the monetary Bizarro legion has invaded earth (or at least Japan and Europe). And the US monetary policy has been bizarro since Alan Greenspan.