The likelihood of a sharp slowdown in the European Central Bank’s (ECB) stimulus program and aggressive monetary policy scares investors as they anticipate turmoil in Italian and Greek bond markets.the Financial Times quoted analysts as saying on Wednesday.
Key comments
“Government debt across the currency bloc has fallen since last week’s ECB meeting, when President Christine Lagarde declined to rule out the possibility of an interest rate hike this year as the central bank battles record inflation.
“For bond investors, That prospect is particularly worrying because the ECB has repeatedly stressed that it will wind down its vast bond-buying programs before raising rates.“.
If the central bank rushes to end its bond-buying programs, investors may once again choose to focus on the daunting debt loads of Italy and Greecewhich are equivalent to around 160% and 200% of the gross domestic product, respectively”.
Source: Fx Street
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