Investors put ECB commitment to the test

By Lewis McLellan
21 Jan 2021

European Central Bank president Christine Lagarde refused to be drawn into naming a specific spread target that the central bank will defend in a press conference on Thursday but investors may find out for themselves in the wake of the meeting. BTPs sold off sharply after Lagarde spoke, perhaps indicating that the central bank has not done enough to convince investors of its support.

“The ECB would not commit to yield curve control, and just said it will ‘preserve favourable financing conditions’ so now investors are pushing back,” said an ECB rates strategist. “The ECB won’t mention what level it will try and target, but investors might force them to reveal it ...

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