Most analysts agree that the ECB’s flexible bond reinvestment measure under the PPP program alone is not enough to offset bond market pressures.
The bond markets reacted positively to the decision of the European Central Bank, after the extraordinary meeting of its Board of Directors, to create a special “tool” in order to address the “asymmetric pressures” on the region’s bonds.
Most analysts agree that the measure of flexible bond reinvestment acquired by the ΕΚΤ under the PEPP program, alone is not enough to balance the pressures on the bond market.
However, with regard to this new tool, it needs to be clarified under what conditions the ECB will “take action” in the bond market of specific Member States. The main question is whether the states that will ask the ECB to make use of this tool will have to make specific commitments.
EUR 76 million were recorded in HDAT, of which 44 million were related to purchase orders. The yield on the 10-year bond stood at 4.26% compared to 1.63% of the corresponding German bond, resulting in a margin of 2.63%. In the foreign exchange market, the euro is slightly lower against the dollar, as the European currency traded early in the afternoon at $ 1.0405, from the level of 1.0432 $ where it was when the market opened.
The indicative price for the euro / dollar exchange rate announced by the ECB was set at $ 1.0431.
