German government bonds opening lower Wednesday, but off their worst levels amid caution over a Greek debt/bailout deal. Risk-on sentiment waned after news that the emergency meeting of EU finance ministers to review Greece’s bailout plan has been called off & replaced by a teleconference because more “technical work” was needed between the Greek government and the troika. Also noted is Standard & Poor’s Ratings Services lowering its ratings on seven Portugal-based financial institutions, including major lender Santander. This is despite soothing words from Chinese central bank governor Zhou Xiaochuan, who said China will continue to invest in Europe government bonds and will get more involved in helping solve the European debt problems through investment in its rescue funds. The markets have heard these empty words in the past and fear is that further delays in Greek negotiations are likely to continue until the next EU FinMin meeting in Brussels that is scheduled on Feb 20/21, with G20 Summit on Feb 25 and potentially the EU Head of State Summit that is due to take place on Mar 1/2.
EasyForexNews Research Team