Investors bank on ECB rate cut

The world's biggest bond investors are betting European Central Bank President Jean-Claude Trichet will be forced to follow Federal Reserve Chairman Ben S. Bernanke and step up the pace of interest-rate cuts.

BlackRock Inc, Schroder Investment Management and Standard Life Investments Ltd, which together oversee $1.6 trillion, are buying German debt securities even though yields are close to record lows. Barclays Capital, the top primary dealer of German debt, says bunds offer "unprecedented value" because the ECB will accelerate rate cuts as the economic slump deepens.

While the Fed reduced its target rate 4.25 percentage points this year to as low as zero, and the Bank of England cut its benchmark by 3.5 percentage points to 2 percent, the Frankfurt-based ECB lagged behind.