Feelgood factor returns but market frets over ESM Bills

A rare breeze of positive sentiment blew through the eurozone this week as Moody’s affirmed Spain’s ratings and its bond yields tumbled. Coupled with a return to form for the European Financial Stability Facility (EFSF) on Tuesday, an encouraging Spanish auction and a blow-out covered bond for Bankinter, the backdrop to a European Council summit that began on Thursday was as warm as it has been for months.