Thursday, January 27, 2011

Eurozone not out of the woods yet

Financial Times
January 26, 2011

It says something about the improved sentiment towards the eurozone that auctions such as today’s €2bn-€3bn sale of Italian index-linked five-year bonds are barely causing ripples. Impressive demand on Tuesday for the bloc’s “bail-out bond” appears to have extinguished such fundraising event risk.

We have, of course, been here before. Many investors have enjoyed profitable trades during the past year selling the eurozone after every relief rally predicated on verbal support or forced financial assistance like that seen for Ireland and Greece.


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