Southern Europe bonds rally as ECB pushes boundaries with new plan

Southern European government bonds rallied on Thursday, with yields on Italian and Greek debt tumbling after the European Central Bank announced the terms of its 750 billion euro bond-buying scheme to limit the impact of the coronavirus crisis.

The ECB said it would not apply its self-imposed purchase limits for any individual countries and would buy debt with a maturity as short as 70 days, well down from one year under previous purchase plans.

This was seen mainly benefiting the bond markets of Italy, Portugal and Greece, after investors sold their bonds heavily in recent days as the virus ravaged the struggling eurozone economy.

The legal decision paves the way for the ECB to hold more than a third of any country's debt - a level it is close to reaching with benchmark bond issuer Germany and some smaller countries - and to focus its stimulus where it is most...

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