According to the Greek state debt management office, today’s auction was well received despite the country’s status as a hotbed of risk for the European Union.
The Greek government was able to tap global credit markets to raise 1.3 billion euros in 13-week bills – above the target amount of 1 billion euros. With demand relatively strong, short term yields dropped to 4.11%, lower than the 4.2% witnessed in a similar auction in November.
Spanish bond auction results were additionally positive as the Spanish Treasury was able to raise towards the top end of its 2.5 billion to 3.5 billion offering range.
Global demand for Spanish debt was healthy as the government was able to raise 3.52 billion euros in 3-month and 6-month bills, placing the average yield at below 1.19% and 1.61% respectively – down from November’s auction. The lower yield will undoubtedly make a Spanish bailout unnecessary in the near term, as Prime Minister Rajoy’s administration continues to wave off the necessity of any such measure.
As a result, EURUSD could move higher on a break of the 1.3200-1.3215 resistance barrier. A break above would make a test of 1.3250 imminent, with a correction likely to be held at bay by 1.3044 support.
Separately, UK data was relatively a nonstarter as consumer price inflation was released well within the target range estimated by the market. According to the Office for National Statistics, consumer inflation in the UK rose at a 2.7% pace, with core prices rising by 2.6% annually – in line with forecasts.
Source: FXTrek Intellicharts