Bond Markets Tilt Toward Frankfurt as Draghi Negates Fed

The world’s most-influential bond market might just be in Frankfurt.

As speculation deepens the European Central Bank will start quantitative easing just as the Federal Reserve ends its own bond buying, Europe is gaining more leverage over investors globally as the specter of deflation in the region unleashes greater demand for fixed income. The gravitational pull exerted by German bunds may blunt any jump in yields as the Fed moves to raise U.S. interest rates for the first time since 2006.