Tuesday, August 09, 2011

Update: ECB Bond Buying

by Calculated Risk on 8/09/2011 07:27:00 PM

A little calmer in the European debt markets.

Here is a graph of the 10 year spread (Italy to Germany) from Bloomberg. And for Spain to Germany.

The Italian spread is at 281, down from 371 last week, and the Spanish spread is at 271 down from 387. The yield on the Spanish Ten year bond is down to 5.1%, and the Italian 10 year is down to 5.2%. From the WSJ: ECB Move on Italy, Spain Calms Market

The ECB will disclose its total purchases for the week on Monday, but some analysts estimate the ECB bought at least €3.5 billion ($5 billion) on Monday and billions more Tuesday—however, a small fraction relative to the size of Spain and Italy's debt markets.
The yield on the Portuguese 2 year is down to 11.8%. From the NY Times: Portugal Faces Challenges in Meeting Bailout Terms
Three months after approving a €78 billion, or $111 billion, bailout for Portugal, officials from the International Monetary Fund, the European Commission and the European Central Bank are conducting their first review of progress toward meeting conditions set for emergency financing. Those include budget cuts and an economic overhaul intended to stimulate growth.

Portuguese officials and business executives expect a broadly favorable assessment ...
The Irish 2 year yield is down sharply to 10.8%. However the yield on the Greek 2 year is up to 34.6%!

Here are the links for bond yields for several countries (source: Bloomberg):

Greece2 Year5 Year10 Year
Portugal2 Year5 Year10 Year
Ireland2 Year5 Year10 Year
Spain2 Year5 Year10 Year
Italy2 Year5 Year10 Year
Belgium2 Year5 Year10 Year
France2 Year5 Year10 Year
Germany2 Year5 Year10 Year