ECB sidelined as CB traders expect more spread widening
The ECB’s covered bond purchase programme, which started two weeks ago, has failed to have any effect. Its modest buying of core issuance at the short end has been outweighed by considerably better selling, as sovereign volatility has undermined confidence.
The euro sovereign crisis, which only a few weeks ago was largely confined to the periphery, is now spreading to the core with Dutch, Finnish and Austrian government bond markets coming under pressure. As a result, core covered bond markets have also weakened.
The most conspicuous move
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