ECB Hikes Rates (As Expected), Unexpectedly Raises Inflation Outlook Amid EU Recession
https://www.zerohedge.com/markets/ecb-h ... -recession
As a net energy importer, the region is particularly exposed to rising prices if the crisis in the Middle East escalates, and markets are underestimating the possibility of additional tightening in response. That leaves short-maturity government bonds particularly vulnerable.
Italy’s debt load makes the EU’s third-biggest economy especially fragile in the face of tighter policy.
The ECB’s single mandate of price stability also makes Europe’s policy makers more likely to hike in the face of rising energy costs.
The gap between Italy and Germany’s 10-year bond yields recently breached 200 basis points, a wide.
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