Market Extra: Mario Draghi unraveled 2 of the world’s most popular trades

It has been a week since European Central Bank President Mario Draghi helped set in motion a selloff in global government bonds by, among other things, refusing to commit to an extension of the European Central Bank’s bond program.

Investors were already worried that the European Central Bank and the Bank of Japan were running out of bonds to buy. These fears were exacerbated by reports that some BOJ officials are opposed to further expanding the bank’s bond buying program or could back a move to reduce purchases of longer-dated debt. Draghi’s remarks and uncertainty over Japan ignited a selloff, helping to steepen developed market yield curves around the world and temporarily unsettling equity markets.

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