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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (94711)	9/18/2012 5:47:46 AM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 217742

Print DJ Spanish Bonds Renew Slide as Bailout Nerves Build 18-Sep-2012 By Jessica Mead The standoff between Spain and the financial markets grew tenser Tuesday as the country's bonds slipped to their lowest point since the European Central Bank pledged its support for the region's debt markets at its September press conference. Yields on 10-year Spanish government bonds climbed back above 6% for the first time since Sept. 6, when the ECB fleshed out its plans to buy the short-term bonds of countries that commit to monitored rescue packages. Spain is seen as the leading potential beneficiary of this scheme, but its reluctance so far to sign up to the cost-cutting measures linked to this assistance is fuelling concerns that the plan could be delayed. Spanish bonds have rallied markedly in recent weeks, but the bulk of that climb has been driven by expectations that the ECB would soon start snapping up Spanish debt. "The tightening of yields since late July has allowed Spain to get its back off the wall and be a little more selective about terms and timing. But the widening seen over the last few days does show the fragility of the renewed confidence," said Elisabeth Afseth, fixed income analyst at Investec, adding that she expected Spain would nonetheless have to request a precautionary support program soon. Tuesday, the yield on the benchmark 10-year bond climbed five basis points from Monday's close to 6.01% while the five-year yield rose three basis points to 5.02%. Yields move in the opposite direction to prices. The euro also dipped against other major currencies. The country is set to sell up to 4.5 billion euros ($5.88 billion) of bonds on Thursday, with the sale seen as a test of investor confidence given the recent climb in yields. Tuesday, Spain's Deputy Prime Minister Soraya Saenz stopped short of saying the country is close to agreeing to aid terms--a tricky step given rising social unrest over unpopular austerity reforms. But she said the government is in talks with European Union partners over the potential conditions that could be attached to a financial support plan for Spain. "We are analyzing how far the ECB would go" to support markets, Ms. Saenz said in an interview with local television station Telecinco. "Once we have a very clear and deep understanding" on the pros and cons of potential conditions attached to a support plan, and "once there's a level of unanimity within the EU, we'll take the best decision for all Spaniards," Ms. Saenz said. "Meanwhile, we need to continue with reforms." Luc Coene, head of the National Bank of Belgium and a member of the ECB's governing council, warned Monday that the sharp improvement in the Spanish bond market since the ECB unveiled its plans to support troubled states could soon reverse, if Spain doesn't ask for a euro-zone aid program and accept the necessary conditions. "It's clear that if Spain does decide not to demand a program... we will not buy Spanish bonds. The same is valid for all the other countries. It's a program that is made for all member countries," Mr. Coene told an audience of students and investors. "If that doesn't happen, Spain will have to cope with rising spreads again, and they will have to decide what they will do," he added. -Geoffrey Smith in London and Santiago Perez in Madrid contributed to this article.