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The ECB has limited ammunition

Markets last week seized on hints from the ECB that it may restart its bond purchase programme in an attempt to contain Spanish bond yields. But there are clear doubts over whether the ECB has the conviction or the ammunition to prevent yields from rising further. President Draghi has generally shown even less enthusiasm for the programme than his predecessor and the ECB’s bond purchases have been nowhere near the scale of those made by the Bank of England and the US Federal Reserve.

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