FXstreet.com (Barcelona) - In Europe, BTP yields back up sharply yesterday on Sicily's solvency concerns. The 10-year yield spiked around 8bps in late trading to close at 6.045%. PM Monti is pressing for the resignation of the Sicilian Governor and said he will push for spending cuts in the region. Moody's downgraded Sicily from A3 to Baa2/Negative yesterday this following the sovereign downgrade last week.
With a government debt of around €5.3bn at the end of 2011 (according to FT/Bloomberg) the issue is hardly systemic for now but it certainly raised a few eyebrows yesterday.
In other European news, investors received some additional color from the ECB overnight on senior bank bondholder haircuts. According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “The question of senior bondholders sharing the burden of ailing banks is 'evolving' and will further develop with changes to Ireland's bailout program.” Exact details of what is meant by this are unclear.
With a government debt of around €5.3bn at the end of 2011 (according to FT/Bloomberg) the issue is hardly systemic for now but it certainly raised a few eyebrows yesterday.
In other European news, investors received some additional color from the ECB overnight on senior bank bondholder haircuts. According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “The question of senior bondholders sharing the burden of ailing banks is 'evolving' and will further develop with changes to Ireland's bailout program.” Exact details of what is meant by this are unclear.
