Will the ECB Step In? (Seeking Alpha)

• Italy, Spain bond yields pull back on ECB rumors. Peripheral government bond yields dropped from earlier highs and the euro (-0.4%) paired heavy losses on rumors that the ECB bought Italian and Spanish government bonds as the debt crisis threatened to spiral out of control. The success of an Italian €6.5B bond auction also helped ease the pressure. Meanwhile, Italian politicians are uniting around the need to pass a €40B austerity plan and to do so sharpish, which they hope will calm fears about the country's massive debt.
• Another day, another meeting. While Rome begins to burn, Republicans and Democrats continue to squabble over a deal to increase the $14.3T debt ceiling. They'll meet again today but the story will probably be the same come tomorrow. Gerald Seib reckons Obama is pushing for the grand deal of $4T, which the GOP is resisting, as it will make good election politics for him, although less so for his fellow Democrats. And if you've got to cut Medicare and hurt the elderly, better not to drag it out.