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This article was published on February 27, 2015 at 09:35.
The last change is the February 27, 2015 at 11:30 am.
Performance countered for European stocks. The movement more relevant, in hindsight, regards government bonds. BTP-Bund spread on the ten-year maturity fell during the trading day and according to the Bloomberg terminal, below the threshold of 100 basis points. A dynamic that the president of the board Matteo Renzi said with a Tweet “spread to below 100, a thousand former temporary workers hired in Melfi with JobsAct, via bank secrecy not only in Switzerland, and by that ‘#lavoltabuona.”
The impact of monetary policy
A closer look, however, is the effect-Q and the ECB. The plan for the purchase of government bonds by the European Central Bank, in fact, hit more and more of the same yields. In particular, those of the peripheral countries of the Eurozone.
So, for example, the ten-year BTP has a rate around 1.36%. That of the same maturity as the Spanish, at about 1.28%. These values, until not long ago, absolutely unthinkable. Which, not deny it, do not have any reference to the country risk and the socio-economic viability of the two States issuers. The proof? Comes from the US T-Bond. The title decades of Washington, in fact, a yield above 2%. Of course, as indicated by MPS Capital service, it is a trend due “to the data on inflation which, while falling below expectations, on a steady growth of wages in real terms.” Which reinforces the idea of elimination from their press release of the adjective ‘”patient” in reference to the attitude of the Fed on the timing of a rate hike. ” It, however, can not hide that having the rate on BTp much below that of the T-Bond is a strong contradiction. Which can only understand the effect, precisely, that of quantitative part to March.
Moreover, it was precisely Maria Cannata, head of the management of the public debt of the MEF, to confirm it. “Now that were announced details of Qe -said yesterday at a hearing in the House – we see every day in a fall in interest rates,” as well as that of a ‘big appetite for the securities of the suburbs. ”
The situation in Greece
that appetite that instead, in the day when the German parliament votes on the agreement for the extension of aid to Athens, does not seem to involve the public debt of Greece. There will also state the agreement between the government of Prime Minister Tsipras and former Troika. The market does not seem to believe it, indicating a strong sense of pessimism. The yield curve is very Hellenic fact reversed. The deadline to 1 month makes 10.6%. One to three months down to 4.7%; Six months later, the rate drops again to 3.6%. The 2-year government, for its part, makes 13.7% while the five years has the yield of 12%. The ten-year, finally, is below 10%. In short, it is clear that these numbers indicate the persistence of the fire in that of Athens. A dynamic that, for now, does not seem to disturb investors as a whole. Everyone is waiting for the drug monetary Mario Draghi.
Inflation developments
… A sea of liquidity that, from a technical standpoint, it is justified by the objective to return inflation Europe to the value of 2% required by the Statute of the ECB. Well, on this front in Italian consumer prices rose in February by 0.3% cyclical (-0.4% in January) while, at trend level, fell by 0.2% (-0.6% in January). In short, there is an attenuation of the decline on an annual basis. A dynamic that is also replicated in Spain. Overall, though, this is not such as to induce movements afterthoughts on the front of the monetary policy of the European Central Bank.
… and the euro
Which, with his moves, reported at levels “sensible” the euro-dollar exchange. A cross that now sees the euro back above 1.12 share towards the greenback.
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