What EZ Bond Yields Imply About S&P Downgrades
Since Standard & Poor’s cut the ratings of 9 Eurozone countries, the euro has done nothing but rally. One of the main reasons why the EUR/USD has been so resilient is because the downgrades had very little impact on European bond yields. French and Spanish bond yields have increased but by less than a tenth of a percent while Italian bond yields decreased since the S&P announcement. The following table compares the 10 year bond yield and 5 year CDS spreads of key EZ nations today vs. before S&P’s announcement. Five year credit default spreads rose, representing an increase in risk premium but the uptick was nominal. The biggest consequence of sovereign downgrades are higher yields and borrowing costs but based upon 10 year bond yield spreads, troubled European nations have been spared from Armageddon for the time being.
« CNBC Video: Whats in Store for Euro | Home | Losers Add to Losers »
September 3, 2011 • by: Boris Schlossberg
VIDEO TOURS
Come join us on detailed tour of our website
Watch high probability day trading in action
see our
Channel
February 16, 2012
by: Boris Schlossberg • Boris Schlossberg
February 16, 2012
by: Kathy Lien • 2012 elections eurusd, 2012 elections us dollar, Kathy Lien
February 16, 2012
by: Kathy Lien • 2012 elections eurusd, 2012 elections us dollar, Kathy Lien
February 16, 2012
by: Kathy Lien • Bank of Canada, Bank of England, Bank of Japan, Kathy Lien, Reserve Bank of Australia, central bank rate hike expectations, rbnz rate decision, reserve bank of australia intervention, reserve bank of new zealand
February 16, 2012 • by: Boris Schlossberg
February 10, 2012 • by: Boris Schlossberg
February 3, 2012 • by: Boris Schlossberg
January 26, 2012 • by: Boris Schlossberg
January 20, 2012 • by: Boris Schlossberg
February 16, 2012 • by: Kathy Lien
February 16, 2012 • by: Kathy Lien
February 16, 2012 • by: Kathy Lien
February 16, 2012 • by: Kathy Lien
February 9, 2012 • by: Kathy Lien
Leave a Comment