Italian Debt Still Flying Off The Shelf

Currencies Direct November 29th 2011 - 2 minute read

The
Italian treasury released a small positive for the global markets this morning
by announcing good demand of their latest bond auction. With the Italian debt
market being the most closely monitored amongst all of Europe,
these comments brought some relief to the recent run of weakness in the single
currency. The Euro is by no means out of the woods, but at least it is
potentially the start of a period of Euro stability. This followed yesterday’s
reports that the IMF is planning a €600bn package to help Italy and a credit deal for Spain could be
in the pipeline. These rumours were played down by IMF Chief Christine Lagarde
who stated that “the IMF
can only make loans available when a government asks for them” and as yet, Italy
hasn’t. The Euro has strengthened slightly off the back of this news though we
are very far away from a long term resolution so any real gains for the single
currency are unlikely in the short term.

Reports
out today stated that the UK
will fall victim to a second recession. The consensus, by a leading economic
forecaster warned that the rise in unemployment will further damage Chancellor
George Osborne’s hopes that he will be able to meet his deficit reduction
target. The figures will make grim reading for the chancellor, who will deliver
his Autumn Statement today. This is followed by more bad news for the UK
recovery with millions of public sector workers walking out on strike tomorrow;
a move that will cost the economy an estimated £500m.

The
markets will continue to move on any more news from the struggling debt nations
and on any bond auction updates from the Eurozone. The week ends with the
non-farm payrolls figure from the US which is always viewed as a key
indicator for how the global jobs market is performing.

Report
by Tim Lewis

Written by
Currencies Direct

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