Tuesday, January 11, 2011

Eurozone periphery bonds rally

Financial Times
January 11, 2011

Eurozone peripheral government bonds rallied after successful debt auctions and a reported intervention by the European Central Bank, but investors remained edgy ahead of the key test of the week.

Fears that today’s Portuguese bond auction could lead to an escalation of the eurozone crisis failed to undermine demand for Greek, Italian and Dutch bonds on Tuesday.

Greece’s first debt sales of the year saw it raise €1.95bn ($2.5bn) in 26-week Treasury bills at yields of 4.9 per cent – only marginally higher than the last sale of similar debt in November. Foreign investors bought 40 per cent in a positive sign for Athens, which has previously relied heavily on domestic institutions to buy its debt.

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