ECB Resumes Buying Bonds With Gusto As Italian Yields Remain Well Wide Of 7%

The ECB released its update of SMP purchases in the week ended January 6 (so with settlement through Wednesday): following two weeks of barely any acquisitions (€19MM and €462MM in the two weeks prior), the most recent number was €1.1 billion so gradually we are getting back to normal. The total amount of gross purchases is now €218.4 billion and €213 billion net of maturities. This will also be the amount the ECB will have to sterilize, hopefully without hiccups. Naturally, the more money is parked with the ECB, the less is available for sterilization. And since the total under the SMP will only keep rising, very soon the ECB will likely hit a plateau beyond which it will become increasingly difficult to successfully sterilize the entire weekly rolling amount. And the worst news is that despite the hundreds of billions in "sterilized" (when the banks are kept alive by the central bank, is it really sterilized?) monetizations, Italian yields are once again well over 7%, and the spread of Bunds is now back to a nosebleed inducing 522 bps: how long until LCH wakes up again and hikes margins sending the entire European bond complex a step function lower?

Full ECB SMP history:

SMP vs Italian Bond yields: