Italy bond yield rises back above 7% despite ECB (Nov 2011)

euro_bonds

Source: WSJ Market Watch – Italy bond yield rises back above 7% despite ECB

This news ties to the fact that European governments’ bond yields are kept down largely by the ECB buying them to create artificial demand when private investors shun them. The ECB’s printing press allows it to intervene in these troubled bond markets when investors have doubts over the financial credibility of these countries.

Notable excerpts:

Italy’s 10-year government bond yield bounced back above the 7% level Wednesday. The yield fell earlier, with several strategists reporting heavy buying of Italian debt by the European Central Bank.

The 10-year yield rose 12 basis points to 7.04%, according to FactSet Research.

Bond yields rise as prices fall. The 7% level is widely viewed as marking an unsustainable level.

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