Difficult months lie ahead for Italian government bonds. After discontinuing direct purchases, as of July 1, the ECB will in fact stop replacing bonds held in its portfolio that have since matured. The repurchases will continue for the Pandemic emergency purchase program (PEPP) only and no longer for the Asset purchase program (APP), which for the most part had focused precisely on government bonds. What is called quantitative tightening (Qt) is a phenomenon to be closely watched. Indeed, there will suddenly be a lack of strong demand for securities in the market, which will necessarily have to be replaced by other investors, and this will not always be easy. UniCredit calculates that in 2023 the total assets held by the ECB through repurchase programs will decrease by about 210 billion euros and by 165 billion euros when looking at government bonds alone. It is unclear who will be able to replace the central bank's hitherto providential "hand." UniCredit estimates that, between now and the end of the year, the amount of Italian government bonds to be replaced will be about 23 billion euros.
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