Italy and Spain are once again attractive for large international investment funds. According to the Wall Street Journal, many funds have decided to start buying government bonds of the two countries again following the measures of the European Central Bank to relieve pressure on the debt.
The list of the US newspaper includes giants such as Jp Morgan Asset Management, which has 840 billion dollars invested in fixed-yield government bonds, Black Rock and Blu Bay Asset Management, together with the British fund Standard Life Investment.
The trend reversal is an indication of how the desire to find easier interest rates is returning to the markets, as evidenced by the auction of German bonds on 5 September where demand has not covered supply. The signs of a return to risk appetite should be interpreted positively as an indication of a recovery of confidence in the financial markets.
The drop in the Btp-Bund spread below 400 basis points shows the trend. Despite the positive signs, however, the WSJ warns it is still early to be able to say that "we will continue on this path".
