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By Bloomberg

Bill Gross’s pronouncement that German bonds are the “short of a lifetime” is coming up against a more powerful force in the form of Mario Draghi’s asset-purchase program.

For now, strategists see that trade limited by the European Central Bank president. A Bloomberg survey forecasts 10-year bund yields rising no more than 0.41 percentage point by year- end to half a percentage point -- where they were three months ago. Two-year yields are seen staying below zero through at least the third quarter of 2016. That’s when the ECB is scheduled to finish its 1.1 trillion-euro ($1.2 trillion) quantitative-easing program that’s depressed yields from Germany to Portugal.

“At the moment there’s this kind of black hole of QE buying which is dragging bund yields and other European bund yields down in its orbit,” Kevin Adams, London-based director of fixed income at Henderson Global Investors Ltd. in London said in an interview with with Mark Barton on Bloomberg Television’s “Countdown” program. “They’re just dragging that bund yield down and down and down.”

Benchmark German 10-year yields dropped one basis point, or 0.01 percentage point, to 0.09 percent as of 10:50 a.m. London time, having touched 0.049 percent on April 17, the lowest since Bloomberg started tracking the data in 1989. The 0.5 percent bund due in February 2025 rose 0.08, or 80 euro cents per 1,000- euro face amount, to 103.98.

‘Too Early’

Gross, who built his reputation at Pacific Investment Management Co. and left in September, now manages the $1.46 billion Janus Global Unconstrained Bond Fund. He said in a Twitter message on Tuesday that the 10-year bund is the “short of a lifetime.” Gross said he’s betting against German government bonds because of the slow economic expansion in the euro area, the ECB stimulus measures and as concern about Greece’s debt burden grows.

Patrick Armstrong, chief investment officer at Plurimi Investment Managers in London, said he has already learned that betting against the ECB could be dangerous.

“We started shorting it once QE was announced,” Armstrong, whose company manages about $2 billion, said in an interview on Bloomberg Television. “We were too early into this short. At some point you will get the reflation effects from QE coming through and we don’t know when that is.”

For now, the ECB’s program that has helped push yields on about one-third of 6 trillion euros of the region’s government bonds below zero remains unchallenged, with demand for German debt, perceived by investors as among the safest assets in the region, also being buoyed by Greece’s conflict with creditors.

Germany’s 10-year bund yield will probably rise to 0.5 percent by the end of 2015 and 0.7 percent through the third quarter of 2016, according to the median prediction of analysts and strategists. That compares with an average 1.97 percent in the five ears ended Dec. 31, 2014. Two-year yields will rise to minus 0.05 percent by September 2016, a separate survey shows.