70% Of German Bonds Are No Longer Eligible For ECB Purchases; Will ECB Cave?

``The surge in sovereign debt since Britain's vote to exit the European Union last month has pushed yields on about 70% of the securities in the $1.1-trillion Bloomberg Germany Sovereign Bond Index below the ECB's -0.4% deposit rate, making them ineligible for the institution's quantitative-easing program. For the euro area as a whole, the total rises to almost $2 trillion... We expect that during the next ECB meeting Draghi will announce changes to existing ECB policy and do away with the deposit rate floor entirely, or in combination with the elimination of the ECB's capital key.''