ECB, EU combine to calm SSA markets
The ECB has ridden to the rescue of the euro sovereign bond market again, buying five to eight year Italian and Spanish sovereign bonds. The central bank’s intervention, combined with the expression of continued support for euro sovereign debt by China and news that Brazil is in preliminary talks with the Bric countries on a strategy of buying bonds of eurozone countries, marginally improved sentiment on Wednesday.
The better tone, albeit fragile, provided a positive backdrop for the European Unions 10 year bond.
Barclays, BNP Paribas, Commerzbank, HSBC and UBS opened books on Wednesday morning for the 5bn transaction which is being priced at 20bp over mid-swaps.
This is a couple of basis points higher than was
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