TPI
Definition · Level 8 · Rates, FX & macro
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Transmission Protection Instrument: the European Central Bank’s (ECB) July 2022 tool for buying the bonds of a member state hit by an “unwarranted, disorderly” spread widening, so that its rate policy still reaches every euro country.
Example
A sudden jump in the BTP–Bund spread brings talk of the ECB’s TPI.
Rules and market figures change: check the current ones before relying on this.
Where Tradecraft teaches it
Level 8 · Rates, FX & macro, in the lesson “Bunds, BTPs and the Eurex futures”: Germany’s bond curve, the four Eurex futures and the BTP–Bund spread as a stress gauge.
Related terms
- BTP–Bund spreadItaly’s 10-year yield minus Germany’s, in bp.
- BundA German federal government bond, most often meaning the 10-year.
- EurexThe Frankfurt derivatives exchange of Deutsche Börse, which lists the main euro-area interest-rate, bond and Euro Stoxx 50 futures and options.
- Euro-Bund futureEurex’s 10-year German bond future: €100,000 face value, deliverable bonds with 8.5 to 10.5 years left, tick 0.01 = €10, delivery on the 10th of…
- Schatz, Bobl, Bund, BuxlEurex’s four German bond futures: Schatz (about 2 years), Bobl (about 5), Bund (about 10), Buxl (about 30).
- 2s10sThe 10-year Treasury yield minus the 2-year yield, in bp: the headline gauge of curve slope.