Trouble in QE paradise?

In a research note by the firm's strategists, they warn that the ECB's pandemic emergency purchase program (PEPP) may be exhausted by mid-October as the current rate of purchases is unlikely to slow down with a wave of supply coming to the market.

They argue that "it is hard to imagine a slower pace for now given that EMU spreads continue to face widening pressure from issuance".

For some context, the ECB settled €20 billion worth of debt purchases under PEPP last week - based off the available data here.

And yet, that is doing little to suppress the widening of bond yields spread in the region. The yields spread between Italy and Germany 10-year bonds is now at 242 bps today:

Italy Germany