Monday 19 February 2018

European central banks said to be buying Irish government bonds

European central banks bought Irish government bonds today, according to two traders who witnessed the transactions.

The central banks bought Irish debt with maturities no longer than two years, the people said, under condition of anonymity because their trading is private. Buying was light, both traders said.

Irish two-year notes rose for the first time in six trading days, pushing the yield down three basis points to 3.2pc as of 1:31 pm in London.

The yield has crept higher from 2.38pc on August 4, the last time it posted a daily decline. Irish 10-year yields fell relative to benchmark German bunds for the first time in four days, narrowing the spread by three basis points, or 0.03pc point, to 286 basis points.

One of the people said they had seen the European Central Bank buying, while the other said purchases were by the Irish central bank. Two other people said central banks had asked for prices and not completed any transactions.

A press officer for the European Central Bank declined to comment. Nobody was immediately available to comment at the Irish central bank.

“The ECB buying allows the Irish government to take a little longer to get its house in order, or dig its own hole,” said Ciaran O’Hagan, a fixed-income strategist at Societe Generale SA in Paris. “We have yet to see concrete evidence of progress in reining in the budget deficit towards euro zone averages.”


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