ECB is actively managing Eurozone bond yields, but doesn’t call it curve control

A Bloomberg report quotes sources familiar with the matter as saying that the European Central Bank (ECB) manages bond yield spreads between the weakest and strongest economies of the Eurozone.

The strategy explains why the spread between Italian and German debt has stayed remarkably stable despite the recent political crisis in Italy. 

The strategy is slightly different from the yield curve control implemented by the Bank of Japan (BOJ) and the Reserve Bank of Australia (RBA). These central banks target some bond yield and pledge to buy enough bonds to keep the pinned at the target rate. The BOJ targets 0.1% on a 10-year yield, while the RBA targets the three-year yield at around 0.25%.