24 hours in the sovereign debt market

Discussion in 'Economics' started by ASusilovic, Sep 22, 2010.

  1. Remember that ’successful’ Irish bond auction on Tuesday?

    Thought not.

    Sovereigns – Greece 820bp (+15), Spain 240bp (+6), Portugal 385bp (+20), Italy 200bp (+8), Ireland 467bp (+33), Belgium 144bp (+1), Hungary 348bp (0) BP 195bp (+1)

    That’s a record wide for Ireland.

    [​IMG]

    (Charts and quotes from Markit.)

    http://ftalphaville.ft.com/blog/2010/09/22/349476/24-hours-in-the-sovereign-debt-market/

    EUR/USD = 1.3376 last print. Scratch my head.:confused:
     
  2. Portugal auction was good, so it's all coming back now... Hence, the EUR.
     
  3. Well, at 4.69 % and 6.24 % yields you don´t have to think twice if you´re a hungry pension fund / insurance fund, or ?
     
  4. Why are they borrowing more money shouldn't they be paying off the money they already owe?
     
  5. Tsing Tao

    Tsing Tao

    with or without the ECB's help?
     
  6. Without the ECB's help...

    How can they avoid borrowing? Whatever happens in the future, they have a deficit to finance...

    And, sus, I sure hope these hungry people are thinking twice... 'Cause you know what happens if you're too hungry and bite off more than you can chew?
     
  7. Tsing Tao

    Tsing Tao

    just curious but why did rates rise 1% from prior if it was successful?
     
  8. Didn't they borrow loads of money from the ECB and the IMF to cover the cost of the urgent maturity and interest payments. Why are they asking for more money again so soon after borrowing that money. How are they going to pay it off if the they need more debt to pay off the existing debt surely this is self defeating.
     
  9. "Ireland, Greece and Spain sailed through crucial debt tests with successful bond
    issues on Tuesday, cooling concern that the eurozone is slipping into a new financial
    danger area.
    Ireland's government public debt agency said it had placed bonds worth 500M euros
    due in 2014, with demand 5.1 times greater than the amount offered. The bonds
    carried a yield of 4.767 percent, up from 3.627 percent at a similar previous operation.
    Ireland also placed eight-year bonds worth 1.0B euros, 2.9 times oversubscribed at
    a rate of 6.023 percent, which compared with 5.088 percent at a previous issue."
    http://www.thejakartaglobe.com/afp/ireland-greece-spain-sail-through-bond-auctions/397353

    isn't the amount relatively small ?
    the Irish made a Lot of cut-backs society wide that i think went
    by unnoticed because
    there was no public outcry/demonstrations unlike Greece, so i'm
    presuming their 'budgeting' is in hand
     
  10. Not sure what 1% you might be referring to here, but rates did rise as a result of the uncertain future facing all these countries.
    Who borrowed loads of money? Neither Ireland, nor Portugal, nor Spain borrowed from the IMF or the ECB. Only Greece received funds as part of an EU/IMF rescue package. Moreover, based on simple arithmetic I really don't see the reason for the current borrowing to be necessarily self-defeating.
     
    #10     Sep 22, 2010