Eurozone sovereign spreads: it’s different this time

Chart Highlights

• Peripheral Eurozone issuers, such as Italy and Spain, saw their risk premia over German Bunds increase in the light of the extensive fiscal rescue packages required to deal with the fallout of the COVID-19 crisis
• But large-scale central-bank buying meant that spreads widened much less than in the Eurozone debt crisis of 2011-12 or during the Italian government-deficit conflict in 2018
• Yield premia on Spanish Bonos rose significantly less in the current environment, reflecting a much stronger fiscal position both compared with the Eurozone debt crisis and relative to its Mediterranean neighbour

Source: Qontigo