Government debt issuance set to dwarf ECB reinvestments
Reinvestments from the ECB’s asset purchase programmes, a key monetary policy instrument going forward, could offer important support for smaller periphery sovereigns, but not much for Italy or Spain.
What you will learn:
- We expect net asset purchases under the ECB’s asset purchases programmes to end by July.
- This will be a major change after seven years during which the ECB bought more sovereign debt than governments issued, becoming the most important player in the sovereign bond market.
- The potency of reinvestments to prevent an unsustainable rise in spreads within the eurozone can be bolstered in two ways.
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