Spreadex Market Update

Tentative start to trading



European markets opened cautiously this morning as investors were tentative due to comments by the European Central Bank that they would intervene to cap borrowing costs for Spain and Italy. It seems investors are wondering whether capping borrowing costs will remove the incentive for investors to buy into bonds which could potentially fail to yield a return if the nations are declared bankrupt.

Greece is also back on the agenda today. Headline reports over the weekend have indicated that German policy makers have insisted there is no room for negotiation over Greece’s current austerity measures.

Thus, it seems today investors will ponder the possibility of Greece leaving the Euro, again, because of excessive austerity measures imposed by eurozone officials as well as the potential that private funding to eurozone nations could dry up if a borrowing cap is imposed to bonds.

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