Greek deadlock hammers Spain, Italy; Bunds rally |
| Reuters - May 14, 2012 |
Spanish and Italian bond yields and default insurance costs surged on Monday as investors worried Greece could abandon the euro and Spain's ailing banks dumped riskier assets, propelling safe-haven German yields to record lows.
The euro fell to a near four-month trough against the dollar and global stocks slid after a major Greek leftist party refused to join a unity government, taking Athens closer to the brink of bankruptcy and a possible exit from the euro bloc.
German Bund futures hit an all-time high of 143.69 while 10-year cash yields plumbed a record low of 1.434 percent. With capital preservation paramount in investors' minds, German yields looked likely to push further into uncharted territory.
Greece's political impasse, the bad debts plaguing Spanish banks and further signs the euro zone was heading into recession all heightened investor fears that the region was lurching deeper into crisis, pushing Spanish and Italian borrowing costs higher.
Read Full Article from Reuters
- Posted: 2012-05-14 11:13:38
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