European Central Bank purchases of government bonds — as much as Eu25bn, said some sovereign DCM specialists — and liquidity support for the region’s banks settled nerves and yields in equal measure this week. But questions over the long term operation of the Eu750bn offered by the European Union and International Monetary Fund stabilisation package went unanswered, potentially opening the door for renewed bouts of volatility.
Still, the sheer scale of the bail-out package announced at 3am on Monday delivered its framers intentions. Bond markets stabilised, auctions from peripheral sovereigns went well and, although there was little in the way of new issuance this week, bankers expect that, with a few more days of
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