Italy 2, 5 and 10y Yields and 2s5s 2s10s over last 12m
While yields have been moving on the long end of the curve lately, yields on the short-end remain significantly lower than last fall. Due to the heavy reliance on short-term markets, we wouldn’t expect additional action from the ECB until IT or ES curves are in danger of flattening or inverting. Expectations of another long-term liquidity program by the ECB before that are, in my opinion, premature. As seen by yield action following Feb 29 LTRO, there is not much impact to be had unless there is a much larger spread to be earned by participating banks. See also: SPAIN yields

Italy 2, 5 and 10y Yields and 2s5s 2s10s over last 12m

While yields have been moving on the long end of the curve lately, yields on the short-end remain significantly lower than last fall. Due to the heavy reliance on short-term markets, we wouldn’t expect additional action from the ECB until IT or ES curves are in danger of flattening or inverting. Expectations of another long-term liquidity program by the ECB before that are, in my opinion, premature. As seen by yield action following Feb 29 LTRO, there is not much impact to be had
unless there is a much larger spread to be earned by participating banks. See also: SPAIN yields

Tags: italy ltro ecb