Forex Flash: Talks of ECB plans moving the market – TD Securities

FXstreet.com (Barcelona) - Today's European sentiment improved earlier on Spiegel reporting that the ECB may introduce a yield or spread cap as part of their bond buying plan, helping risk to drift higher and Spanish and Italian bond yields to drop. However, the German Finance Minister's spokesman rejected any knowledge of that matter and that would be "problematic", causing risk sentiment retracement.

"We think this is an option clearly under discussion by the ECB, since as we discussed going into and coming out of the last ECB meeting, almost everything is on the table and a credible plan must entail financing any needs the market is not willing to finance if the conditionality and fiscal plans in place are seen as sufficient by policymakers", wrote TD Securities analyst Richard Kelly, taking Buba's comments - that purchases could be unlimited but sufficient in any case - in a positive light.