Yield-on-irish | Forex Blog

August 12, 2010

Irish Borrowing costs ridiculous

Filed under: OANDA News — Tags: a-record-low, central-bank, daily, european, forex round up, patrick-honohan, raise-the-level, usd, yield-on-irish — admin @ 1:58 pm

Central Bank governor Patrick Honohan has described Irish bond market spreads as a “setback”.

Irish bonds spreads widened after the European Commission approved the Government’s move to raise the level of capital it can inject into Anglo Irish Bank.

“The spreads are a setback for our hopes of a narrowing to reflect the fiscal credibility of the country,” Mr Honohan told the Daily Telegraph.

“I don’t look at them every day but at this level they are ridiculous.”

Bond spreads yesterday hit the highest level in a month, reaching almost 300 basis points at one point, and the yield on Irish 10-year bonds broke through the 5.4 per cent mark, while German 10-year bund yields fell to a record low.

They closed just below 289 basis points, and this morning were at 288 basis points.

Mr Honohan also criticised Anglo in his interview, describing the bank as “egregious, in a league of their own”.

Irish Times

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Greece sinks another -1.5%

Filed under: OANDA News — Tags: a-further-1-5, a-pay-freeze, country, deepening, eur, european, forex round up, gbp, greece, national-bank, usd, year, yield-on-irish — admin @ 12:43 pm

The Greek economy shrank by a further 1.5% in the second quarter of the year, Greece’s statistics agency has said.

That adds to 0.8% decline in GDP recorded for the first three months of the year, suggesting that the decline in the economy is speeding up.

Greece’s GDP has fallen 3.5% since this time last year.

The country has been forced to bring in severe public spending cuts since it sparked a Europe-wide debt crisis earlier this year.

Greece’s statistics agency Elstat said the “significant reduction” in public spending had contributed to the deepening of the country’s recession.

Economists said they were not surprised by figures, and blamed the “uncertainty” surrounding the government’s austerity measures for the falls in GDP.

“Economic activity seems to be declining at an accelerated pace due to high uncertainty and the gradual implementation of austerity measures,” observed Nikos Magginas, senior economist at the National Bank of Greece.

The total decline in GDP during 2010 is forecast to hit 4%, according to the European Union and the International Monetary Fund.

A raft of austerity measures has been announced by Greece since December last year.

They include a pay freeze for public sector workers and reform to the tax and pensions systems.

BBC News

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