• According to the latest rumor mill, the ECB is no longer considering offsetting purchases of peripheral debt (read: Italian debt) by selling non-Italian bonds from its holdings outright. So, our prior take on the ECB’s new spread control tool – which we dubbed Operation Twist with a twist – is now ancient history. The ECB’s change in tack with regards to the spread control is positive for Italian bonds, though caveats that we will explain over the course of today’s Comment apply.


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