The spreads for Europe’s economically weak peripheries over equivalent German bonds—the European benchmark—continue to approach their pre-bailout highs. The 10Y spread in Spain again reached record levels amidst rumors that IMF, EU and the U.S. Treasury may be creating a EUR250bn credit line for the country (so far the EU and the Treasury department have […]
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Spain
Investors are feeling more at ease with the uncertainty facing global market. The AUD/JPY exchange rate—a popular FX carry trade and risk metric—has moved off of its recent lows of less than 74 to a level of 79.4. At the same time, 3M LIBOR halted its climb, and has remained fairly steady around 0.54%, albeit […]
Keep an eye on these government bond auctions, especially for Spain and Portugal, as a bad auction can provide the catalyst for further risk aversion: June 9th: 09:00 GMT Germany: 2y Schatz Auction €6bn 09:30 GMT Portugal: 3y and 10y auctions €1.5bn 09:30 GMT UK: New 2020 Gilt £3.75bn 17:00 GMT US: 10y Note Auction $21bn June 10th: […]