- Strong performance by commodity currencies
- Euro still wavering
- China/US fx tensions likely to intensify again
- China/Japan bond tensions emerge
- German growth now tapering off
- BOC raises Canadian bank rate by 25bp to 1.00%
- Beige Book noted ‘widespread deceleration’
More grief for Europe’s peripheral bond markets on Wednesday, specifically Greece, with the Greek/German 10yr government bond spread widening a further 15bp to 957bp (just below the peak back in May of 965bp). Interestingly, Norway’s enormous $450bn Government Pension Fund has been buying up Greek debt, as well as Spain, Italy and Portugal – clearly, they are of the view that none of these countries will default. Also, the FT has run a story this morning suggesting that the ECB has bought between €100m and €300m of Greek, Irish and Portuguese bonds this week as it recommences its Securities Markets Programme. Portugal held a successful 11yr auction which attracted a bid/cover of 2.6 times. Also, the Irish Finance Ministry announced that Anglo Irish, that enormous albatross around the neck of the Irish government and taxpayer, will be split up into a good bank and a bad bank...Read More
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