Two of the major Spanish newspapers are reporting that the European Central Bank is once again buying up peripheral bonds to halt speculation that has been dragging down markets and driving up risk premiums throughout trading today.
This was clearly reflect in the market today, which earlier saw a huge blowout in spreads, but which has come in quite a bit.
Competing Spanish paper ABC is also reporting in a liveblog of market events that the ECB “has seen itself obligated to intervene in the secondary bond market” in order to slow sovereign debt fears in Italy and Spain.
rumour or no, risk premiums appeared to slow their rapid climb around 11:40 AM in Spain, or 4:40AM EST. The Ibex 35, in free-fall up to that point, also appeared to stall its downward spiral.