This might be what’s underpinning these moves:
An idea is floating around that the ECB/EFSF are considering setting a maximum threshold on yields for each country. They will then defend these levels — in essence pegging yields. ie. Italian 10s won’t be allowed to trade above 5%.
There’s also talk about a minimum yield for Germany but that doesn’t make a lick of sense to me.
The whole idea sounds risky and unlikely. I’m sure there are some bond market vigilantes that would love to take a run at bankrupting the EFSF.
