ECB bazooka: not yet but here is the framework
ECB President Draghi did not deliver the bazooka markets expected. He madeECB bond purchases conditional on countries formally requesting these
purchases (through the EFSF/ESM) and abiding by a set of conditions. In this
context, he disappointed markets by making ECB interventions in sovereign bond
markets more difficult. We do not expect peripheral countries to request
EFSF/ESM purchases unless they are forced by markets (as was echoed by
both PM Rajoy and PM Monti), and the reduced supply in August buys them time.
By conditioning ECB support on EFSF programmes the timing of the implicit ECB
backstop becomes more uncertain weakening its near-term market impact, in our
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