Sovereign bond markets in the euro area and the United States have taken a remarkable turn over the summer. Despite the ongoing strong recovery from the crisis, the revival of inflation and surveys signalling firming expectations among market participants that central bank asset purchases globally may gradually slow in the near future, sovereign bond yields have declined and partly reversed the upward trend observed in the beginning of the year. In my remarks today I will discuss the drivers of recent bond market developments and zoom in on two factors that may currently pull yields lower: one relates to concerns ... (full story)