German government bonds are trading higher Monday as EMU peripheral spreads widen, albeit in thin volume conditions. Attention turns to the Eurogroup meeting later today in Brussels and also comments from ECB President Draghi at the European Parliament, in Brussels. Elsewhere, Sterling markets are little changed on Sky News headline that it has obtained emails between Bank of England deputy governor Paul Tucker and former Barclays CEO Bob Diamond. Tucker gives evidence to the TSC Libor fixing inquiry later today at 1530GMT. EMU Peripheral spreads are wider, with Spain leading the charge following reports this morning note the Spanish region of Valencia is facing the risk of a default if it doesn’t receive more financial aid from the government, according to El Mundo newspaper. Spain 10-year yield is at 7.06% — above the 7.00% threshold level, and 10-year yield spread is 12bps wider at +571bps. Italy 10-year yield spread is 10bps wider at +478bps.This widening comes despite earlier unsubstantiated market talk that ECB checking prices in peripheral bonds.
EasyForexNews Research Team