The Banking and Strategy Initiative

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European Sovereign Debt Crisis: The music in government bonds ( Hellenic Summit Games 2012)

As the ministers get closer to the EUR130 bln bailout package approval even as private investors schedule is tied upop with or without voluntary accession to haircuts of above 70%, the Italian Industrial Orders followed in the German ZEW sentiment of last Tuesday to 5.1 from -25 (as in the ZEW Industrial sentiment for Germany), with a 5.5% improvement against an expected 0.5% improvement after a 0.2% improvement last week. The bond markets are singing to  Super Marios’ tunes as Draghi ‘s liquidity and Mario Monti’s new performance brings Italian 10 year yields to 5.44% , Spanish yields to 5.15% and German Bunds keep trading at 1.96% occassioning others the opportunity to catch up on the yields

The IMF is paying only EUR 13 bln odd in this tranche , with the first instalment from Greece due on March 20. The Italian spread on the 10 yr to german bund is now less than 350 bp but still along way to go as investors flock to Italian and Spanish bonds ahead of the new 3 yr LTRO tranche on target from Mario Draghi raising prospects of commodity inflation worldwide coupled with the British QE3 of GBP 50 bln approved last week

 

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This entry was posted on February 20, 2012 by in Amitonomics, European Sovereign Debt crisis.

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