Current bond yields suggest that, to date, the European Central Bank’s purchases of sovereign bonds on the secondary market have done little to reassure markets that Portuguese, Italian, Irish, Greek, and Spanish sovereign bonds are not risky assets.
In fact, bond purchases seem to be working against bond yields recently—the increase in money dedicated to purchasing bonds has pretty much increased at pace with bond yields since August.
This might be leading to a lot of the speculation about the bank’s success in intervening on a larger scale.
Whatever you believe about whether ECB intervention on a much larger scale would actually work, this chart by Reuters chartist Scott Barber is the clearest sign that the ECB is doing nothing so far:
Photo: @scottybarber on Flickr