European Bonds

January 21st, 2009 8:49 am | by John Jansen |

In Europe yields on 10 year bonds have dropped 8 basis points in the UK and 3 basis points in Germany. Yields on Italian Spanish and Greek bonds have widened by 7 basis points ,4 basis points, and 10 basis points respectively against Germany. Irish bonds have widened by 26 basis points versus Germany.

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  1. 10 Responses to “European Bonds”

  2. By Alex on Jan 21, 2009 | Reply

    Benchmark 10yr gilts yielded 3.6% at one point yesterday.

  3. By K T Cat on Jan 21, 2009 | Reply

    Can you speculate on this: What will happen to the Euro if multiple Eurozone nations default on their debt? Italy, Greece and Ireland look like they’re heading that way.

  4. By Alex on Jan 21, 2009 | Reply

    Exiting the euro is preferable to defaulting, but I don’t know whether the rules would allow it.

  5. By Andrew on Jan 21, 2009 | Reply

    ??? haha looks like England is going to default on its debt. The pound has been crushed the last 2 days some of the biggest moves ever! It was trading 1.45 monday morning now it is 1.38 and I noticed it hit 1.37 earlier this morning.

  6. By Andrew on Jan 21, 2009 | Reply

    KT, I firmly believe that the Euro is a fundamentally flawed currency and in the next 10to20 yrs will not exist. Jim Rogers holds this view as well.

  7. By Mike on Jan 21, 2009 | Reply

    What’s the best site for Irish news or to watch CDS on Ireland?

    I think Ireland is cooked, and I think that means very bad things for UK, Italy, Spain, and Greece.

  8. By Danny on Jan 21, 2009 | Reply

  9. By AC on Jan 21, 2009 | Reply

    I disagree, experiencing financial distress, a country would be more likely to get closer to the monetary union than away from it. Icelend is more seriously considering Eurozone membership than at any time in the past.

    There is too much political capital invested in the Euro, it will not fail. Because of this, any current Euro weakness is a risk premium for a risk that is highly unlikely.

  10. By IF on Jan 22, 2009 | Reply

    I agree with AC that in the short term no country will exit the EMU. Ten or 20 years as suggested by Andrew is a long time and a lot could happen. I have not seen many good long term projections. If the west was not able to see the fall of the German wall mere months before it happened… I mean, it was so obvious with hindsight! (I lived there and did not see it coming either.)

    Personally, I think the Euro is the closest we have to the gold standard. Its rigidity might destroy the economies, but at least it is stable. (The only promise that was given to the peoples of Europe. And remember, a lot of these countries had a choice. And they still remember the times in the past when the government printed as much as they liked, especially in the commie block and club med. It did not do them much good. Only hard currency was able to get the rare goods.)

    Lets see who defaults first: Greece or California? Does anyone seriously expect California to get off the dollar? After all they actually _are_ officially preparing to print Notgeld.

  11. By K T Cat on Jan 22, 2009 | Reply

    Thanks to everyone who replied to my question. I appreciate the different points of view.

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