Three unidentified people with knowledge said that the European Central Bank is buying Italian and Spanish bonds, which supported optimism to spread in the market, as jitters and rising debt-concerns eased in the market that ECB is ready to intervene anytime to prevent the crisis from spreading further.

Yields in Italian 2-year bonds dropped 18 bp to 6.08%, while cost of insuring against default on European government bonds also declined, while the euro gained sharply against the U.S. dollar. Yields on Italian 10-year bonds retreated 9 bp, while Spanish 2-year bonds fell as much as 8 bp.

The European Central Bank, President Mario Draghi called on European nation to start implementing the decisions and plans approved by European leaders in the past months in order to tackle the two-year old debt crisis once and for all.