Peripheral debt has outperformed Germany by a mile in the wake of yesterday’s LTRO.
Since the first LTRO in late December, we’re more than 200 points narrower in the Italian/German spread, for example.
Both Italian and Spanish yields are below 5% today on an outright basis after peaking near 7.50% in the case of Italy and at 3.68%% in the case of Spain.
Narrower spreads suggest greater risk appetites, generally a bullish factor for EUR/USD, when taken in isolation.
