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The outcome will set the tone for a string of debt sales through early 2012 that risk stretching the eurozone bond markets to breaking point. The EU authorities are hoping commercial lenders will use last week’s flood of cheap liquidity from the European Central Bank to soak up southern European debt and bring yields back under control, starting with Italy’s €8.5bn (£7.1bn) sale of 10-year bonds today. The country must raise [...] An interest rate cut from the European Central Bank and news that Greece has called of its bailout referendum sent equities and commodities higher yesterday. Precious metals also benefited from the general reflation move, with the gold price nudging towards $1,770 per ounce and silver coming close to the $35 mark. Markets were supposedly surprised by the ECB’s move to cut its headline rate from 1.5% to 1.25%, though given the [...] From FT: European negotiators have asked Greek debt holders to accept a 60 per cent cut in the face value of their bonds, a hardline stance that far exceeds losses agreed in a deal between private investors and eurozone authorities three months ago. The stance, delivered to a consortium of international banks at the weekend by Vittorio Grilli, Italian treasury chief and lead eurozone negotiator, is a victory for German-led northern creditor [...] Germany May be Ready to Surrender in Fight to Save Greece Germany may be getting ready to give up on Greece. “After almost two years of fighting to contain the region’s debt crisis and providing the biggest share of three European bailouts, Chancellor Angela Merkel is laying the ground for what markets say is almost a sure thing: a Greek default. “It feels like Germany is preparing itself for a [...] 1) ECB Said to Buy Bonds of Italy, Spain to Cap Gain in Yields “The European Central Bank bought Italian and Spanish government bonds amid concern their rising bond yields may force the two countries to seek bailouts, according to six people with knowledge of the transactions. The ECB isn’t buying Irish or Portuguese bonds, said one of the people, who asked not to be identified because the [...] If anyone saw this coming, it was Ambrose. he has been on this scenario for years and yes, he is correct. Ireland will be kreditanstalt. German banks and German taxpayers will have to pay for this mess. The German banking system is holding trillions of worthless liabilities. The black hole will consume Berlin & Frankfurt. By Ambrose Evans-Pritchard Unless the ECB takes fast and dramatic action, it risks destroying the currency it [...] http://www.marketoracle.co.uk/Article20074.html ‘Make no mistake: This is big,” said Jacques Cailloux, RBS’s chief European economist and the report’s author. “We’re talking about systemic risk [and] the potential for contagion.” |
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