IF A couple of trading days could sum up the mood of financial markets this year, it has to be August 2nd and 3rd.

First, equities plunged in reaction to the latest statement from the European Central Bank (ECB): investors were disappointed that it had not announced an immediate wave of bond-buying.

Then markets rallied just as strongly the next day as they reflected on the ECB’s statement (see article); crucially, the yields on Spanish government bonds fell back.

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