Posted on 09/17/2012 10:02:09 PM PDT by bruinbirdman
Spanish borrowing costs rose above 6pc again as a continued stand-off between Madrid and Brussels fuelled fears that the European Central Bank’s bond buying programme pledge is not enough to stabilise the eurozone.
The yield on Spain’s benchmark 10-year bonds were pulled back just below 6pc at the close, but their steady rise all day reflected bets by traders that Madrid’s determination to resist a bail-out will cause more volatility. Some argued that optimism that followed the unveiling of the so-called “Draghi Plan” to buy bonds was already wearing off.
John Wraith, a fixed-income strategist at Bank of America Merrill Lynch told reporters: “It’s more a case of we are relieved about the bullet we dodged but we don’t necessarily find ourselves in a more stable footing. If you look at the actual sustainability of funding deficits at the sort of levels we are still at, it’s still very difficult to see how these weaker countries can survive long term.”
Pierre Moscovici, the French finance minister, said the “tools are now in place” to help Spain, but the decision to request help could only be made by Madrid. Speaking in London, after a meeting with George Osborne, he said other countries were powerless to move Madrid. “This is a matter of sovereignty,” he said. “Spain has to make a decision on its own. I can not pressure, I can not press.”
Spain’s finance minister, Luis de Guindos said over the weekend that Madrid’s €100bn (£81bn) austerity measures are “sufficient” to meet a deficit ceiling of 6.3pc of GDP this year, despite economists insisting they are not. Madrid faces a big test on the bondmarkets as it seeks to raise €4.5bn in an auction scheduled for Thursday.
Mr Moscovici called for eurozone governments to push ahead with
(Excerpt) Read more at telegraph.co.uk ...
Back up to 6 already - 6.007.
Took the market 2 months last time to rise from 6 to above 7. April through to June.
Italian yields at 5.105. Going back up again..
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