The ECB and EU elected to ignore Italy's debt and soon to be a monstrous deficit. Bond yields plunged.
At the beginning of June, the ECB and EU walked down from targeting Italy with excessive debt procedures. And now, lovey Dovey Christine Lagarde takes over where Mario Draghi left off.
Crucially, for Italy, it's not a German central banker at the helm.
Happiest Man in Europe
Italian 10-Year Yield at 1.6%, Salvini must be the happiest man in Europe... Confronts the EU and EC, and sovereign bond yields halve.
— Daniel Lacalle (@dlacalle_IA) July 4, 2019
Spain and Portugal at 0.2%... All very "fundamental" (irony) But the ECB says there is a need for more stimulus... pic.twitter.com/t27K3Q9gOP
Expect More Balance Sheet Wonders
#ECB balance sheet has jumped by €9.9bn due to a revaluation of Gold reserves to €4,692.6bn, near record high and equal to 40.5% of Eurozone GDP. I am sure that under Lagarde the ECB will restart the bond-buying program again & the balance sheet will hit new highs above €5tn. pic.twitter.com/ZX5XCVED8U
— Holger Zschaepitz (@Schuldensuehner) July 4, 2019
German 10-Year Yield
WOW! German 10y yields fall below #ECB deposit rate in historic move as investors bet on policy easing. Move to more deeply negative yields supports the view that Europe may be following in the footsteps of Japan’s troubles to revive low inflation & growth https://t.co/NkHGBP8CKm pic.twitter.com/ciJs29Xiss
— Holger Zschaepitz (@Schuldensuehner) July 4, 2019
Long Term Prognosis
Add half the Eurozone.. https://t.co/r7SajwoGg3
— Daniel Lacalle (@dlacalle_IA) July 4, 2019
Changing of the Guard
I agree with the above Tweets by Daniel Lacalle.
Meanwhile please note the changing of the guard: Winner France: Germany's Time Has Come and Gone
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