German government bonds are sharply higher Monday, as risk-off sentiment prevails with stocks lower and EMU peripheral spreads wider. Overall, volumes are light today and below average ahead of the EU Summit later this week, which isn’t expected to yield much. The troika visit to Athens has been delayed after new Greek Prime Minister Antonis Samaras and his designated finance minister, Vassilis Rapanos, were both hospitalized last week and unable to attend the EU Summit. In addition, news that Fitch downgraded Cyprus to junk at ‘BB+’, with a negative outlook, also fuelled gains in Bunds. Spain 10-year yield spread is 26bps wider at +500bps following Expansion newspaper story saying that Moody’s is planning to downgrade ‘almost all’ Spanish banks by 2-/3-notches at around 2100GMT. Expansion says that Moody’s is expected to downgrade almost all of Spain’s banks, with the exception of BBVA, Santander and CaixaBank. Italy 10-year yield spread is 19bps wider at +440bps as market builds in concession ahead of heavy slew of
issuance this week.
EasyForexNews Research Team