ECB Goes Hog Wild, Lifts Every Offer In Another Failed Attempt To Calm Market
In yet another attempt which will backfire miserably, starting about 30 minutes ago the ECB has gone absolutely apeshit in the market and has been buying every single piece of paper it could get its hands on, focusing on BTPs with Spanish bonds in second place. As the chart below shows, following what has been a non stop buying spree, the Italian benchmark 4.75% of 2021 has soared from 84.75 to 86 in one non-stop run. The implicit motive is to get the Spanish Bund spread down from 500 bps which virtually guarantees a margin hike and a collapse into the toxic debt hole. Will they be successful? Of course not: we give this intervention another 10-15 minutes tops before Draghi's bond buyers are exhausted and the selling resumes. In the meantime, the ECB's SMP cumulative total is now well over €200 billion.