ECB's QE prolongation equals further flattening and additional purchase changes

If QE is prolonged then it is likely that the ECB at some stage will also have to change the mix of assets it is buying, simply on the back of the logic that there are not enough assets for them to buy. 

"The easiest way to do this is clearly just to further increase the percentage the ECB can buy in bonds issued before 2013. Again, due to the maturity skewness this would flow-wise imply further curve flattening", says Nordea Bank.

That said there is a limit to this strategy. There exists an upper bound to further increases of the limit, as further increases in buying percentages could easily result in pricing differences between two identical bonds from the same issuer whose only difference is the issued year. 

"This would further distort market liquidity, and opens for the possibility of additional QE changes", added Nordea Bank.