Trichet Draws ‘Bazooka’ as Italy, Spain Debt Purchases Begin

European Central Bank President Jean-Claude Trichet started buying Italian and Spanish assets today in his riskiest attempt yet to tame the sovereign debt crisis.

Italian and Spanish bonds surged as the ECB entered the market, sending yields down the most since the euro began in 1999. The single currency, which initially climbed on the news, gave up its gains and fell to $1.4172 at 4:45 p.m. in Frankfurt from $1.4277 at the close of European trading on Friday.