* C.banks buying Portugal, Ireland, Greece bonds
* Operations of 25-50 million euro across all maturities
* Peripheral govt bonds spreads to Bunds narrow
(Adds further dealer comments)
MILAN, May 12 Euro zone central banks were
buying Portuguese, Irish and Greek state bonds on Wednesday in a
move that is supporting a narrowing of bond spreads versus the
German Bunds, dealers said.
The central banks are buying across all maturities up to
10-year bonds for amounts of 25 million or 50 million euros at a
time "in a more significant and organised way" than in the first
two days of the week, one dealer said.
"On Monday and yesterday they (central banks) were a bit
unordered, perhaps also to see the market reaction. Today they
are a lot more active," the dealer said.
As part of a $1 trillion package agreed at the weekend to
shore up the euro and debt-ridden euro zone members, the
European Central Bank announced individual euro zone member
central banks would start buying government debt.
A second dealer said the central banks of Italy, France,
Spain, Germany and Finland were intervening on Wednesday.
"They call directly the primary dealer, ask prices, check
that the levels are not foolish and buy," a third dealer said.
"They buy a bit on all the maturities, from the short-term
up to 10-year, for round sum amounts of 25 million or 50 million
euros per operation," he said.
The banks are mainly buying Portuguese, Irish and Greek
bonds, which have suffered the most, which was supporting all
peripheral country bonds as reflected in yield spreads to Bunds,
(Reporting by Gabriella Bruschi; writing by Nigel Tutt, editing
by Mike Peacock)