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Market Pulse: A twitchy thumbs up for new Spanish austerity

Wednesday, July 11, 2012 - 04:09

July 11 - Spanish bond yields slip further below the key 7% mark after Madrid unveils a hefty €65 bln round of austerity. But the thumbs up today could easily flip to thumbs down tomorrow.

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More protests and Spain on bond markets brace before the volatility. -- Madrid unveils an extra 65 billion euros worth of austerity. This is today's market pulse well let's get straight time -- to Orlando green he's fixed income strategist at credit identical CAB in London. Along the bottom. 65 billion euros a mistake -- -- from Madrid's spy on the heels -- -- today is this a thumbs up from the market. I think so too you know some makes -- some extent the idea areas is that any space have to do. More so sure that it's not going to bring it's that's intended to a sustainable levels and I think the market. It does like this new songs -- but the news that if further progress in the banking bailouts. Well and media thumbs up today but tomorrow we could well see. The market flipping out of me saying well space and recession is not gonna be able to meet these targets well that guys are concerned I mean the idea that right now growth. Remains. It's certainly a long time more -- in time. You know concern that the politicians. Of course percent on land Israeli reinvigorated this this debate. And this is something that I think will need to be addressed was well I'd -- EU level. A Soviet rule based he politicians are coming together and explain some units in the oldest of the to really boost. The economic prospects of -- some of these countries out on it's of Mississippi as severe austerity programs well unsurprisingly it pops Brussels of the commission has come out stay in welcomes the news. From rajoy. That's not only -- story today and how this by bailing story it. While the -- there right now is that in the idiot that the issue will be written really way. Where these banks you know will. Will also begin their funding from. Candy we got the ESM is very much in still being -- this one that will take over on over the long time. But the idea now is to get that -- to get some more details. On on the serve particularly their rescue efforts. On his bond yields I'm heading for the button below seven that Italian yields -- looking button below 6%. That's even though he said that the Central Bank -- out of actually. Said that the it was a breakup was on remote possibility. What's your take on where Italian yields on -- Meantime in yields solved certainly than any great hidden relative to you know Germany of course and you have to understand that gem in the muscles CA that can be very depressed. In the in that sense and in in in on the flip side -- other countries like it's in Spain and even have moved in the opposite directions. It -- saw very much exaggerated due to the lack of unity. Sunny the market's perception at least this alacrity. Through any false track rescue effort. Say I think yields of it's because suddenly come down. Once we can get have been more sense of where we go in terms of long term prospects on the rescue -- I just just to finish up Germany today so ten year bonds on record low one point 31%. As this as -- as legal. I mean now I'll use that yields that should realize. Lou they in a gradual fashion on the -- but say yields should drawings. As -- move towards the the entry in this. -- second half of the year. That's certainly in the very next we have another auction all of these bombs. Next month than that it. You did that sauces like could be around these of the levels again because rescue plan so we'll timetable at least when he was quick quickly enough. Orlando thank you very much my thanks there to all on the green from Jenna I article CIB. Tune in at noon London time MTV they thought market pulse when we dig into what's moving and financial markets and why. I'm Jamie give up this -- Reuters.

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Market Pulse: A twitchy thumbs up for new Spanish austerity

Wednesday, July 11, 2012 - 04:09