ECB demand depresses corporate yields

Corporate yields of euro-denominated bonds reached a 10-year low at the end of August after the European Central Bank brought corporate debt under the umbrella of its asset purchase program started in October 2014. The plan was announced in April to begin in June, and the ECB has since purchased an average of Є6.6 billion per month. The ECB held Є19.9 billion of corporate bonds as of Aug. 31.

Corporate bond purchases made up 11% of monthly net purchases in August and represent 2% of all debt held by the ECB. For perspective, the public sector represented 83% of August purchases and 81% of holdings.