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Post Title. Draghi Spoke : Conditionality far from benign -Tail risk reduced not removed - Positive for Portugal & Ireland

Post Title. Draghi Spoke : Conditionality far from benign -Tail risk reduced not removed - Positive for Portugal  & Ireland | European markets | Scoop.it
And finally Draghi Spoke. There are little surprises- in my view- within the OMT (outright monetary transaction) scheme announced today. Links ECCL Guideline: ...
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Latest comments

Latest comments | European markets | Scoop.it
More an Economic risk pricing than another Euro Spasm - Financials are NOT leading  the way, neither does the periphery.

European markets continue to be rather volatile on a day to day basis, but unlike previous sell off episode driven by Euro-systemic risk increase, I would argue that the latest move are more the result of a more classical economic cycle move with Credit Spread widening at first on the cyclical side rather than the financials. See article.

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The European Central Bank as a lender of last resort | vox

The European Central Bank as a lender of last resort | vox | European markets | Scoop.it
You neee to read again this article by De Grauwe form August 2011, on the back of the OMT decision. The OMT makes the ECB has close as we can get as the Lender of last resort to Euro governments... See also previous comments on poddoux.com
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Latest comments

Latest comments | European markets | Scoop.it
 The surge in long term rate in Spain last Friday was unsettling for many, but  again the yield move in the 10yr yield was not followed by any increase of the yield in the font of the yield curve,...
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OECD chief backs European Central Bank's bond-buying policy - AFP

OECD chief backs European Central Bank's bond-buying policy - AFP | European markets | Scoop.it
AFPOECD chief backs European Central Bank's bond-buying policyAFPBERLIN — The head of the OECD, Angel Gurria said he supports the European Central Bank's plan to buy sovereign bonds of eurozone nations, in an interview published on Saturday.
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Merkel has decided to pay up for the euro - FT.com

Merkel has decided to pay up for the euro - FT.com | European markets | Scoop.it

Interesting aticle by Philip Stevens (FT.com)

. The Politicians vs economist in the European construction and the decisive move by Merkel. "Merkel has decided to pay up for the Euro".

As mentioned in Philip Stevens' FT article last week, I do believe that the OMT supported by Merkel against the Bundesbank views, is a significant shift, similar to the decision by Kohl to overrule the Bundesbank on the East Germany integration The change of the German stance on Greece is also remarkable, along the other decisions to give more time to the other countries (Spain, Portugal). Merkel has entered the election campaign, just when the German economy is showing some weakness.

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In spite of daily volatility/noise, new low on financials' CDS while OMT stays a game changer anchoring Spanish short term rates

In spite of daily volatility/noise, new low on financials' CDS while OMT stays a game changer anchoring Spanish short term rates | European markets | Scoop.it

"European markets remains volatile, but once again the actual moves over several days are actually relatively small. In spite of the negative sentiment, the S&P downgrade, the weak Economic forecast, the ECB pledge to be ready to Buy Spanish debt, Should Spain decides so is anchoring the Spanish short term rates. As argued before, it works well as long as the launch of the OMT can be done swiftly and as Spain is sure to get the approval for such bond buying. The pre-approval process was part of the budget construction. As time passes , Spain is more likely to miss its target and the risk to have delays in the ECB action will increase, weakening the anchor. Recent comments are suggesting - as expected- that Spain is likely to call for the OMT sooner than later. Noise around Greece, indicates a willingness to give Greece more time to adjust.

The OMT supported by Merkel is a game changer and overall allows the market to price better the risk it knows how to price such as economic risk, while re-pricing the country risk (for Portugal for instance). In spite of the noise, Debt spread/CDS of European banks are coming in (new low on ITRX Senior debt) and implied vol falling for banks"... See charts  & comments 

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Some pullback in financials (at last!) - Spanish yields up but relatively minor move - Stay positive

Some pullback in financials (at last!) - Spanish yields up but relatively minor move - Stay positive | European markets | Scoop.it
The ECB bond Buying OMT remains a very significant step forward in Europe, but in itself does not resolves the whole European crisis which by in large remains in the hand of the governments and...
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Continue to follow the Spanish curve... What is the price of the ECB bong buying option?

 The surge in long term rate in Spain last Friday was unsettling for many, but  again the yield move in the 10yr yield was not followed by any increase of the yield in the font of the yield curve,...
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Spanish, Italian Two-Year Notes Drop on ECB Plan, Growth Concern - Bloomberg

Spanish, Italian Two-Year Notes Drop on ECB Plan, Growth Concern - Bloomberg | European markets | Scoop.it
Spanish, Italian Two-Year Notes Drop on ECB Plan, Growth ConcernBloombergThe securities were boosted along with their Spanish peers in the previous two weeks on speculation the ECB will step in to buy them after President Mario Draghi said in a July...
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Berlusconi says an Italian exit from euro would be disaster - Reuters

Telegraph.co.ukBerlusconi says an Italian exit from euro would be disasterReutersFormer PM says would be "disaster" if Italy leaves euro. * Says PDL party pressuring him to run as candidate.
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