(Pictured Athens Stock Exchange)
January 19, 2012
The Guardian: European markets have now closed, and for the FTSE 100 it is the fourth daily rise in a row. The index is up 38.78 points at 5741.15 (more detail here).
France’s CAC is up 1.96%, Germany’s Dax is 0.97% better and Italy is up 2.45%. Another round of successful bond auctions - this time in Spain and France - has helped give investors a bit of optimism about the eurozone crisis. Good figures from a number of US banks have also helped sentiment.
Joshua Raymond, chief market strategist, at City Index pointed out that the FTSE 100 has rallied more than 7.5% in the past four weeks.
And here’s Markit on how things are now in the world of credit default swaps almost a week after the Standard & Poor’s downgrades:
France, along with Austria, was the day’s strongest CDS performer. What do both countries have in common? S&P removed their AAA ratings last Friday. Since then their spreads have outperformed, both tightening by about 30bps. It shows that the market is well ahead of the rating agencies and forward-looking indicators are a better determinant of credit risk.
But we’re not out of the fire yet. The talks between Greece and representatives of private bondholders are due to continue, as the two sides try to resolve how much of a hit the investors will take on their bonds. We’ll have all the details if and when any conclusion is reached, whether later tonight or maybe tomorrow.
Meanwhile, as if we needed reminding of the severity of the situation, Bank of Greece governor George Provopoulos said the country had to implement structural reforms to stay in the eurozone or face dire consequences. According to Reuters he said:
If we ignore reality this time, the outcome will be a given: the country will become economically and politically isolated.
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