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Weekly Eurozone Watch – “Positive Contagion”

Posted By Global Macro Monitor On January 11, 2013 @ 4:30 pm In Markets | Comments Disabled

Key Data Points
German 10-year Bund 5 bps higher;
France 1 bp wider to the Bund;
Belgium 9 bps tighter;
Ireland 9 bps tighter;
Italy 13 bps tighter;
Spain 17 bps tighter;
Portugal 12 bps tighter;
Greece 50 bps wider;
Large Eurozone banks up 5-12 percent;
Euro$ up 2.11 percent.


- Ireland, Italy, and Portugal bond yields fall to post-Eurozone debt crisis lows;
- Ireland sold [1] €2.5 billion of  5-year bonds at 3.35 percent;
- Italy sold [2] €3.5 billion 3-year bonds at 1.85 percent;
- Spain sold [3] €5.8 billion of two-, five-, and 13-year bonds at yields of 2.587, 4.03 and 5.57 percent, respectively.  The auction was strongly oversubscribed;
- The ECB [4] left  interest rates unchanged;
- Greece’s unemployment rate [5]  soared to 26.8 percent—the highest rate ever recorded in the European Union;
- Moody’s slashed Cyprus’ credit rating [6] three notches to Caa3 as negotiations over the €17  billion aid package remains deadlocked and banking systems remains under heavy pressure.

…let’s not forget about one thing. We speak a lot about contagion when things go poorly, but I believe that there is also contagion, positive contagion, when things go well. And I think this is in play now. There is positive contagion.

- Mario Draghi [4],  ECB President

Jan11_EZ_Yield Converge [7]

(click here [8] if chart is not observable)

Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2013/01/weekly-eurozone-watch-positive-contagion/

URLs in this post:

[1] Ireland sold: http://www.telegraph.co.uk/finance/financialcrisis/9789621/Ireland-confident-of-EU-debt-deal-after-bond-sale.html

[2] Italy sold: http://video.cnbc.com/gallery/?play=1&video=3000140637

[3] Spain sold: http://elpais.com/elpais/2013/01/10/inenglish/1357821908_169416.html

[4] ECB: http://www.ecb.int/press/pressconf/2013/html/is130110.en.html

[5] Greece’s unemployment rate: http://www.thedailybeast.com/cheats/2013/01/10/greece-unemployment-hits-record-high.html

[6] Moody’s slashed Cyprus’ credit rating: http://www.guardian.co.uk/business/2013/jan/11/eurozone-crisis-moodys-cyprus-downgrade-bailout

[7] Image: http://macromon.wordpress.com/2013/01/11/weekly-eurozone-watch-positive-contagion/jan11_ez_yield-converge/

[8] here: http://macromon.wordpress.com/2013/01/11/weekly-eurozone-watch-positive-contagion/

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