Friend of ForexLive Vincent Cignarella at DJ FX Trader makes an excellent point about what a lousy idea it would be for the ECB to try and target spreads between peripheral and German debt debt.
Instead of attacking the spreads, traders could just dump German bunds once spreads were “fixed”. Yields throughout the euro zone could rise, rather than just in the periphery, when the poop hits the fan, as it always does.
If the ECB does launch such a scheme, sell German and French debt with their below-zero yields, he suggests.
