Peripheral Spreads Off Intraday Wides, BTPs Look For TLTRO Bridging Loan Discussions

Peripheral spreads pull back from their knee-jerk session wides that came on the back of the previously outlined move from the ECB to “discontinue the reinvestments under the APP as of July 2023,” with the post-statement tick lower in ECB-dated OIS pricing helping that dynamic. 10-Year BTP spreads printed around the 195bp marker before retracing to ~190bp as of typing, still ~4bp wider on the day. As we flagged earlier, there is some worry evident re: the Italian banking sector and June’s TLTRO redemptions, which wasn’t addressed in the post-meeting statement. Expect questions on that matter to come up in the press conference.