By focusing on the short end of the Eurozone periphery curves, Draghi's comments resulted in curve steepening for both Italy and Spain. And as anyone at the Fed will tell you, this is exactly the opposite of the effect one needs to help these economies. The Fed's effort for almost a year now has focused on flattening the yield curve, while the ECB (both in July and today) has managed to accomplish the opposite.
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| 1 day change in Spain's sovereign yield curve (source: Bloomberg) |
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