ECB announces emergency meeting on Wednesday amid market rout By

© Reuters – The ECB will hold an unscheduled meeting today, which some media are calling an “emergency meeting.”

A spokesman for the ECB indeed said that “the Governing Council will hold an ad hoc meeting on Wednesday to discuss current market conditions”.

In the view of most observers, and given recent market moves, the topic should more specifically be the bond market rout in Europe, which saw Italian yields soar and spreads widen further last week. .

Thus, the spread between German 10-year yields and those of Italy, sometimes called the “” in Europe, climbed to the highest since the beginning of 2020 yesterday.

The announcement of a meeting that seems directly linked to this problem today immediately reassured us that the Italian 10-year rate could drop sharply this morning.

The Euro also benefited from these announcements, as seen in the pair, which has so far posted a high of 1.0495, compared to a low of 1.0425 earlier this morning.

Recall that the ECB failed to reassure about the risks of fragmentation last Thursday, which led to a sharp decline in regional bonds (rise in yields), especially those of peripheral countries.

It remains to be seen whether the ECB will be able to communicate on the detailed solution to deal with the risks of fragmentation following this emergency meeting, and it will therefore be necessary to remain on the lookout for any declarations today following the meeting, which will take place at 9 a.m. GMT (11 a.m. in France).

Finally, still on the subject of the ECB, it will be recalled that a speech by Christine Lagarde at the London School of Economics is scheduled for today at 6:20 p.m.

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