Photo: Wikimedia COmmons
The ECB’s announcement last night about Italian bond buying was very quiet. It did not read like a “bazooka” at all.But for now it’s having an impact.
Rates in Italy are plunging this morning. The 2-year yield has fallen about a whole percentage point, from around 4.5% at Friday’s close to 3.5%. Yield on the 10-year has fallen to about 5.4% from over 6%. These are significant moves, as they may make the difference between a country that can borrow and stay solvent and one that can’t.
On the other hand, we’ve seen one-day moves like this a bazillion times, so don’t pop the prosecco just yet.