Europe is at pains to tell us that a Greek exit won't be painful. Is the ECB lending a hand?
That comment from Dombrovskis earlier is playing on my mind. Earlier when talking about the Greek fallout he said;
"The ECB is making full use of tools to ensure price stability"
Prior comments along those lines from various bigwigs have been that the ECB has the tools available to ensure price stability not that they are using them
I may just be reading too much into it but we have to remember that the ECB is in a position to enter the market and calm things down purely under the guise of QE. Under any other circumstances, for a situation such as this, the OMT would be the perfect tool to help stop yields ramping up. That requires paperwork and hoops to be jumped through before it could actually be used. QE removes all that as the ECB has free reign to buy so can keep yields in check, and thus reduce volatility
"But", you may say, "there's been no anomalies in the weekly QE numbers". That may be the case but it doesn't mean that the ECB can't sit back and trade the headlines when they negatively affect the market.
Italian 10 year yields on Monday
By and large it's probably business as usual but let's not forget the reversal we saw in the Euro and bond yields after Monday's gap open.
The ECB can pick and chose what and when to buy and there's no reason to say that their not playing the Greek trade too
Is Draghi trading Greece?
