As Citi’s rates strategists have pointed out, the ECB could counteract this – end of the ECB’s QE – saying that it is “pretty likely that there will need to be an adjustment in prices – “through an “Italian Operation Twist” (lengthening the maturity of their BTP holdings), but such a response might not come immediately, given the ECB’s reluctance to favourindividual countries, unless associated with the conditionality that comes with an economic adjustment programme.

Source: Citi Research

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