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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
BTP
10Y BTP spreads move 6bp wider (last 246.6bp) on a Reuters sources piece saying ECB policymakers "see no need" to activate the Transmission Protection Instrument to purchase more Italian debt.
- That's because, according to the piece, despite rising borrowing costs, "market reactions did not appear 'disorderly' or 'unwarranted'".
- The widening of the spread suggests that this revelation was not entirely priced in, though it's likewise doubtful that there is widespread expectation that the ECB will step in just yet.
- Wednesday's 257.9bp high was the widest since April 2020, probably getting into territory that would be considered worrisome.
- But the article reminds that it would take more significant market dislocations to get the ECB to consider activating TPI.
- Not only that, if the current reactions are not "unwarranted", they are implicitly considered "warranted" - at least, per Reuters' "four sources close to ECB decision makers".
Italy 10Y Spread Over GermanySource: BBG, MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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