Fresh eurozone debt rally stumps fixed income bears

Quantitative easing in the eurozone and inelastic demand from institutions have been blamed for the latest bond market rally to catch out some investors.

The start of 2015 has seen another sharp drop in European sovereign and corporate bond yields, as investors flock to the asset class despite valuations viewed as unattractive by most retail buyers. Data provider EPFR Global reported the highest inflows on record for global bond funds in the week to 7 February, while European high yield issuance in January hit a post-crisis record of $16bn, according to Moody's. Meanwhile the European Central Bank's quantitative easing programme, which began today (9 March), has prompted the unprecedented sight of sovereign and even corporate bonds tra...