News that the ECB Governing Council is holding an emergency meeting today shows that policymakers are taking the threat of rising peripheral yields more seriously than they were last Thursday at their regular policy meeting. Ten-year Italian yields have fallen from 4.3% at the close yesterday to just below 4.0% at the time of writing. It would be surprising if the Bank has nothing to announce today, but seems almost certain that any statement will fall short of a detailed anti-fragmentation tool. Therefore, there is a good chance that the meeting fails to halt the widening in spreads.
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