EU summit moves push Italian, Spanish yields lower

Spanish and Italian government bond yields fell sharply on Friday and safe-haven German government debt sold off after euro zone leaders agreed to re-model the bloc's rescue funds, but the relief may be brief.

Catching markets by surprise, the leaders agreed to allow the rescue funds to stabilise debt markets and directly recapitalise banks, responding to pleas from Spain and Italy to help lower their borrowing costs.

The banking proposal, which Ireland said could be applied retroactively, brought Irish 10-year yields below their Spanish equivalent for the first time since 2008.

But in the latter part of the European session German Bunds were off their intra-day lows, with traders and analysts saying the market is slowly starting to see holes in the measures.

Read Full Article from Reuters

- Posted: 2012-06-29 13:06:33

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