The European Central Bank is accelerating the creation of a new anti-proliferation shield: from emergency summit to mandate to technicians. Differential dips, BTP yield less than 4%

The European Central Bank has appointed the technical offices of “To speed up Complete a new anti-fragmentation tool, One anti-spread shield To be then submitted to the Board of Directors. Communicate with European Central Bank after, after emergency summit summoned to respond to the recent disturbances on Bond Markets. This is the move Eurotower has decided at the moment to address the increase in the countries’ government bond yields more indebtedness From the Eurozone, starting atItalia Which in recent days has seen a leap Spread between Bond And the Btp. But starting today, with the announcement of the extraordinary meeting, the difference between Btp And the Bond It’s back in deflation, with the Italian 10-year bond yield falling below 4 percent.

Today “the board of directors met for one exchange of views On the current market situation – reads a note from the European Central Bank – since the gradual process of normalization Politics started in December 2021the Board of Directors has pledged to take action against Risks From back subordinate fragmentation. there pandemic It has left permanent weaknesses in the eurozone economy already contributing to it uneven transmission normalization of our monetary policy,” the statement admits. It is partial reflect Compared to last Thursday’s position at the Presidency of the Republic Christine Lagarde He did not provide details of possible interventions to contain the spread of the disease at the end of the season Maxi Purchases of government bonds. Signs of a change of strategy had arrived yesterday with words Isabelle SchnabelMember of the Executive Committee of the European Central Bank. The German economist said that the European Central Bank will not tolerate “changes in the financial conditions that go beyond the basics and threaten transmission Policy monetaryA concept that actually suggested a potential intervention in the bond markets.

European Central Bank governors, at today’s meeting, “considered that it is one appropriate response Delegating technical departments to prepare one a tool Against financial retail ‘: This is a comment Mario CentenoPortuguese Central Bank Governor and European Central Bank Adviser, during a speech in Lisbon. Centeno, in clear reference to the discrepancy between the turning point in the sign monetary normalization The need to continue to support debt with Extended Interventionsstressed that monetary policy “works for middle limit“.

Reaction to the markets – Meanwhile, it was only the announcement of the top that made its effects, with the BTP-Bund difference dropping by more than 20 points compared to 241 Closed on Tuesdays. While the Italian 10-year yield returned immediately less than 4%. After the ECB statement, the spread between BTP and the Bund dropped to a level 223.9 points. Italian annual yield decreased by 29.1 basis points, falling to 3.872%more than double the decline recorded by comparable German stocks (11.9 points). From this morning European stock exchanges remained positive, with Avarian Piazza (Ftse Eb is always above 2%) which was confirmed as the pink jersey.

The stress of the past days – On Monday, the yield on BTPs soared above 4%, the highest since December 2013. The spread against German Bunds widened in the morning to 248 points Base, at its highest level since April 2020, when Italy was in full lockdown. Also yesterday, Tuesday, it closed above 240. At the beginning of the week, the banks, which have 400 billion of public securities on their balance sheets and whose value is inversely proportional to interest rates, lost their strength in the stock market, which led to the heaviness of Piazza Avary. It is the result of a perfect storm Which has been preparing for months, even if the “missed ads” from European Central Bank After last Thursday’s meeting. This means that there are no details on new details Anti-proliferation plan, with the support of the rulers of southern Europe and France, but Germany is retreating. Reservation about how it works became a file perfect excuse To sell securities low above all (but not only) from The most fragile countryItaly, which is about to survive without the umbrella It is represented by the extreme purchases of Eurotower that began in 2015 and intensified during the pandemic.

mindless – according to Bloombergwhich is a possible response from the European Central Bank to combustion From spreading is to use the pandemic program reinvestment baby. And the sources, quoted by the US Agency, declare that they do not know whether there are other, more targeted measures on the table. Based on data released at the end of May, the European Central Bank made a purchase of Pepp More than 1,700 billion in debt. The programme, which was launched in March 2020, closed at the end of June but with the possibility, until 2024, buy back New bonds with capital repaid by those already purchased that arrive gradually Limit. for Italia Some estimates indicate 200 billion possibility of purchase, but voices critical of the effectiveness of such a measure note that, given the pace of repayment, there is a risk of not being able to purchase more than three billion Italian Securities Per month. One of the hypotheses under consideration is the ability to deviate from the general standards for the distribution of national debt purchases, which makes it possible to purchase, for example, Italian BTPs with paid-in capital by German Bund. However, such a hypothesis would have to encounter legal obstacles: it would form a file cash financing subordinate Balance condition – expressly prohibited by treaties and the ECB Statute – and you may face new treaties Lawsuits.

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