Italy leads European bounce as policymakers walk Lagarde's words back

  • Italy plunged 17% yesterday and its bond market more or less crashed after ECB head Christine Lagarde disavowed responsibility for the central bank to help that country out.
  • She later went on TV to try and walk back that rookie mistake, but the toothpaste was already out of the tube.
  • Today, ECB member and Italian central bank chief Ignazio Visco took to Bloomberg and said the ECB can indeed front-load bond purchases to support any EU jurisdiction. He also said the central bank is at the ready to add to a modest monetary stimulus package announced yesterday.
  • The Stoxx 600 is higher by 7.25% today, led by a 15.3% advance for Italy (NYSEARCA:EWI). Bond spreads have come in a ton as well, with Italian 10-year yields down 13 basis points to 1.61%, while Germany's rise 15 basis points to -0.59%.
  • Related ETFs: VGK, FEZ, HEDJ, EZU, IEV, IEUR, EPV, EURL, SPEU, DBEU, EEA, HEZU

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