The Euro has stalled this morning in trade in Asia after sharp rebound the previous day … The single European currency was down 0.25% at $ 1.3710, having regained nearly 1% yesterday in the wake of statements by Angela Merkel and Nicolas Sarkozy, who reiterated their commitment to do to stay in Greece within the Euro zone. Against the yen, the euro was also down this morning, crossing the threshold of 105 Yen / Euro
Investors yesterday welcomed the policy statements, and the announcement by the European Commission that it would study the creation of a concrete market of Eurobonds. A solution that would pool the European debt markets and reassure, but to which Germany is strongly opposed
Beyond the announcement effects, traders believe that no concrete progress has yet been made on the Greek case after the conference call last night from Merkel, Sarkozy and Prime. Minister of Greece George Papandreou. Markets remain so skeptical about the ability of Europe to prevent a failure of Athens, which in turn could trigger a new crisis in the banking sector in the euro zone.
Their concern was also reflected by higher interest rates during the last auction of government bonds in Italy, Tuesday. Investors expect a deterioration in the rating by Moody’s of Rome in the coming days, after warning from the rating agency on this issue in July.
Today, it was the turn of Spain to issue up to 4 billion euros of government bonds, a transaction that could also be marked by a rise in interest rates and moderate demand from investors, after the further deterioration by Fitch last several Spanish regions highly leveraged.
