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Trading news
9 May 2013
Forex Flash: Portuguese 10 year auction sends clear signal - DBS Group
FXstreet.com (Barcelona) - DBS Group analysts note that the success of Portugal’s 10-year bond auction also sent a clear signal that struggling EU governments are starting to regain access to market funding.
They also add that the Greek 10-year bond yield fell below 10% for the first time since late 2010 and the same trend was witnessed earlier in the Italian and Spanish markets. They see that this is important because Eurozone can now focus on nurturing the denominator of its debt/GDP ratio, instead of strangling it with excessive austerity. They write, “Last week’s ECB rate cut was important in sending the same message. The market seemed to like what they see. EUR/USD did not fall below 1.30 on the rate cut.”
They also add that the Greek 10-year bond yield fell below 10% for the first time since late 2010 and the same trend was witnessed earlier in the Italian and Spanish markets. They see that this is important because Eurozone can now focus on nurturing the denominator of its debt/GDP ratio, instead of strangling it with excessive austerity. They write, “Last week’s ECB rate cut was important in sending the same message. The market seemed to like what they see. EUR/USD did not fall below 1.30 on the rate cut.”