Draghi's Open Mouth Operations Briefly Sent Italian and Spanish Two-Year Yields Negative
Remember when most members of the European Union's periphery weren't considered creditworthy borrowers?
Well, times have changed - and as per usual, European Central Bank chatter is at the heart of it.
On Thursday, Mario Draghi paved the way for additional monetary accommodation in the euro area.
The European Central Bank president indicated that some monetary policymakers thought more stimulus was necessary at the present time, noted that the central bank discussed cutting the deposit rate further, and said that the amount of monetary accommodation the ECB was providing would need to be re-examined at its December meeting.
The cumulative effect of Draghi's open mouth operations?
Yields on sovereign debt plunged across the member nations of the currency union, with Italy and Spain's two-year yields briefly dipping into negative territory:
Four years ago, during the height of the European sovereign debt crisis, who would've thought this was possible?