On April 11 of 2013 Italy has placed €5.16 bn of securities to 3 years with yields falling by 19 points to 2.29%; the yield on ten-year BTP 4.28% hit a low in the last six months and the spread (during the day) fell even below the 300 mark. All this happened at a time with a great political instability. Why?
The answer comes from Japan that over has recently launched several expansionary fiscal and monetary measures (so-called abenomics). Yields in Japan have shrunk, while yen is depreciating, so all Japanese investors will be forced to seek returns elsewhere and pour capital abroad. HSBC economists estimate that this will bring up to a trillion dollars of new liquidity in the international markets.
Investors from all the world have followed. So a big international speculation has gown: Ooer the last week financial market grew; BTp’s yields shrinked from 4.6% to 4.33%, despite the economic crisis and the political deadlock in Italy. This blew the Italian banks on the Stock Exchange, with Piazza Affari (Italy’stock market) pulling upward of 5.40%. Large capital inflows have come across Europe, so that the French bond yields have reached the minimum of the last 260 years. But big purchases have poured in emerging markets, which they promptly took the opportunity to raise a bit 'of money.
Sole 24 ore, April 12th , 2013