ECB reveals amounts of Spanish/Italian debt purchases

The ECB announced on Monday that it had bought a total of EUR 22 bio in bonds of Spain and Italy last week, though it did not give a specific breakdown by country. It also did not break down the bond buys by daily totals. The amount is a bit larger than the market forecast of EUR 15 bio, and brings the total amount of the Securities Market Program (SMP), as the ECB terms it, to EUR 96.0 bio to date. The ECB will 'sterilize' the operation by accepting EUR 96 bio in variable rate tenders (one-week fixed-term deposits) to offset the amount of cash introduced by the bond purchases, which should limit the impact on EUR.
The larger than expected debt purchases don't seem to be having too much of an impact on either the EUR or the bonds of Spain and Italy, which are largely unchanged on the day. On the one hand, the larger amounts could be viewed as a strong statement from the ECB that it's firmly committed to maintaining manageable rates and capital market access for the two countries. On the other hand, some could view the large purchases as an indication of the market's concern, meaning they had to do a larger amount to get the desired effect.
The most important result is that it's working, so far. The ECB will need to continue its debt purchases in the days and weeks ahead until markets are convinced of the ECB's commitment, though it may be able to gradually reduce the amounts its buying. We'll need to monitor this on a weekly basis, to see if the market begins to pick up the slack or whether the ECB has to maintain or even increase the size of the bond buys to keep Spanish/Italian rates manageable. For the time being, however, the move is risk supportive and therefore EUR positive, in our view.

Источник: Forex.com

15.08.2011