Why is there demand in the short, to immediate-term debt markets? Four little letters: LTRO.

Banks can buy 3-year-debt and fund it at 1%. Stay calm and carry on… Carry, get it?

  • Grilli says hopes that recent fall in Italian bond spreads will continue
  • Narrower spread a signal of confidence in Italy more than a measure of ability to service debts
  • Markets more interested in policies than ratings agencies marks

Comments via Reuters.