## Rally in Spanish and Italian markets since July 2012
## Peripheral markets have rallied since July 2012
Both bond and equity markets of peripheral Eurozone countries like Spain and Italy have been enjoying a strong rally, effectively since ECB President Mario Draghi held his famous “whatever it takes to save the euro” speech on July 26, 2012. The ongoing rally resulted in declining risk premiums and increasing investment flows towards these countries’ markets, as investors increasingly perceived the systemic risks surrounding the Eurozone to be fading, while at the same time economic data started to improve.
In the past months, the anticipation of additional stimulus provided by the ECB and upgrades of credit ratings by the rating agencies also led to a further tightening of credit spreads. The intensification of the search for yield by investors, combined with stretched valuations in other fixed income asset classes (like investment grade and high yield credits), have also contributed to the decline in risk premiums.