Spanish and Italian bond prices rose on Wednesday, with investors reluctant to sell before a European Central Bank meeting on Thursday on the possibility the bank may resume its bond buying program. Just days ago, many analysts were expecting bond-buying was the least theECBwould do after bank chiefMario Draghisaid last week that he would do what was needed to preserve the euro. Markets have since scaled back expectations and demand at a five-year auction of safe-havenGerman bondshighlighted that uncertainty. But the risk of disappointment was still considered high and market players said that if the ECB did not act 10-yearSpanish yieldscould retest last week's euro-era highs and Italian yields rise in tandem. "(Draghi) was successful in injecting two-way risk back into the market. You can't go short in these kind of environments if there is a substantial risk of bond purchases," James Nixon, chief European economist at Societe Generale, said. "That buys time but he will be decisively found out on Thursday afternoon if they don't back that kind of language with action."... Continue to read.
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