French Sovereign

Belgium managed to auction €2bn of new paper on Monday morning despite a downgrade on Friday night. Some of Europe’s worst hit sovereign markets saw yields and spreads against Germany tighten on hopes that the IMF was building a rescue package for Italy and Spain.

Italy successfully navigated its planned five year bond auction on Monday morning but any relief on the part of investors is tempered by scepticism over the quality of the sale. French yields rallied but that sentiment may be short-lived, said bankers, as investors targeted Spanish Bonos.