European Central Bank President Mario Draghi is signalling he may go negative in his campaign to rescue the euro-area economy.
Italian 10-year bonds fell for a third day as Prime Minister-designate Enrico Letta consults with other political leaders as he struggles to form a new government to end a political impasse.
Euro-area plans to ensure banks have additional capital buffers are a “distraction” from the need to address sovereign-debt risks, Royal Bank of Scotland Group Plc said.
Greek bond investors, “scared witless” by the recent surge in yields may use any rally in the securities to sell them, damping their advance, Royal Bank of Scotland Group Plc said.
Spanish Prime Minister Mariano Rajoy’s results from his first year in office are about to get a close inspection by credit rating companies and investors.
The European Union would fight any suggestion of debt restructuring by Greece, because it would imply a failure of the bloc’s bailout plan, Royal Bank of Scotland Group Plc said.
Italian and Spanish 10-year bonds dropped, pushing yields up to euro-era records versus benchmark German bunds, on concern that slowing growth will hamper efforts to tame the nations’ debt loads.
Italy’s government bonds fell as demand declined at an auction of 10-year bonds after borrowing costs slid to the lowest level in more than two years last week.
Spain’s plan to help cash-strapped regions sell debt risks piling additional liabilities on the central government as borrowing costs approach the level that pushed other nations into bailouts.
Francois Hollande, who defeated French President Nicolas Sarkozy to become the first Socialist in 17 years to control Europe’s second-biggest economy, pledged to push for less austerity and more growth in the region.
"Spain's budget deficit numbers are crucial."
- Harvinder Sian on Feb 11, 2013
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