The spread between France’s and Germany’s 10y Government bonds remain near levels not seen since the collapse of Lehman as France takes on tough fiscal tightening. Since the onset of the European debt crisis France and German yields have benefitted from worried investors moving funds away from economically weak Eurozone peripheries to the regions ‘stable’ AAA rated […]
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Germany
France is no European angel in terms of its fundamental, yet like Germany the credit has received ‘safe-haven’ status from investors; that is until recently. French 10Y government bonds have traded mostly lockstep with equivalent German debt since the onset of the European debt crisis, but since the beginning of June the spread between the […]
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: […]
The aggregated spreads of Europe’s weakest peripheries plus Belgium are on track to test their pre-bailout levels, as investors question whether or not a default will become necessary and what contagion effects it might have. The biggest concern is that a default could lead to a Lehman like effect halting liquidity as banks and investors […]
Global markets may be converging on a new ‘volatile’ norm as investors revalue risk, as governments begin the painful process of deleveraging to more sustainable debt levels. Thus far fears of sovereign defaults have remained contained to the usual suspects—fundamentally weak nations—leading investors to flock to the safe-havens of the U.S., Japan, and Germany. Risk […]
FRANKFURT (MNI) – Germany’s government is not allowed to help Greece, as such aid would violate European Union law, German business daily Handelsblatt reported Wednesday, citing an internal report from the German parliament. The legal report also rules out any form of financing of the Greek budget through the ECB or national central banks. “Moreover, […]