The mix of lower Eurozone inflation and expectations of additional central bank liquidity appear to have been key in driving Eurozone government bond yields lower this year; and in turn, this may be another reason why yields on major emerging bond markets, like South Africa, have also trended lower.
Provided, as the market consensus expects, that there is no quick reversal of current inflation and policy trends in the Eurozone, developments in that region may continue to dampen, in the future, the impact of US policy normalisation on flows into, and prices of, SA financial assets.