Trichet matters: The impact of ECB moves

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Comments from president of the European Central Bank (ECB) Jean-Claude Trichet on Tuesday (November 30) fuelled significant spread compression.

Spreads on peripheral debts collapsed 30–40 basis points in Italy, Spain, Ireland and Portugal. After last Thursday’s (December 2) press conference, spreads were even tighter. In two days, the 10-year Portuguese government bond/German bund spreads have compressed almost 100bp.

While this could prove temporary, nobody would have bet on such a development

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