The European Central Bank said it will use authority under an existing program to help tighten widening spreads faced by periphery countries. The ECB said it will “apply flexibility” in reinvesting redemptions from its Pandemic Emergency Purchase Programme portfolio “with a view to preserving the functioning of the monetary policy transmission mechanism.” The ECB also said it will “accelerate” the development of a new anti-fragmentation instrument. The ECB had announced it would be holding an ad-hoc meeting earlier in the day. The yield on the 10-year Italian government bond fell 34 basis points to 3.83%, while the euro lost some of its earlier momentum, exchanging hands at $1.0429.
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