“We have this imminent bond-buying by the ECB -- at least that’s what everybody is expecting -- and if euro-zone yields are falling that makes Treasury yields relatively attractive, even at these rates,” said Philip Marey, a senior market economist at Rabobank Groep in Utrecht, the Netherlands.(link)The current state of play for selected sovereign 10 year bonds (with a minor highlight added to the FT graphic):
Come Thursday a very material ECB QE programme will likely become a reality. Switzerland 10 years have already voted: it will mean too many euros in circulation (well, certainly for the Swiss economy).
But what do they know anyway? It's not like Switzerland is a country that is particularly innovative, competitive or even a nice place to live.
In less than 48 hours Mr Draghi will take a shot at spurring them to greater effort in these areas. A devaluation in one's largest export market will be a live demo of an economic tool Switzerland should long have considered weaving into its own set of sad, obsolete and tired economic policies.