Periphery suffers as Russian tensions grow but issuers comfortable

EU Russia Ukraine puzzle
By Craig McGlashan
07 Aug 2014

The eurozone periphery suffered one of its poorest weeks of the year, as a sanctions battle between Russia and the west pushed investor cash into core European debt. But with Spain driving down its funding costs at auction and periphery sovereigns well-funded — plus record low Bund yields leaving investors seeking yield with few options but to return to the periphery in the future — there were few concerns that the issuers will struggle to meet their funding targets this year.

Germany’s 10 year yields dropped to an all-time low of 1.06% on Thursday, after Russia announced on Wednesday that it was banning all fruit and vegetable imports from Europe, as well as imports of other foods from the US and Australia. Russia buys 35.1% of its ...

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