Forex Flash: EUR/USD recover from 1.2880 impressive – BBH
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EUR/USD
FXstreet.com (Barcelona) - The analysts at Brown Brothers Harriman note that the Euros recovery from $1.2880 is impressive and developments are conspiring to keep tail risks at bay.
They write, it may not have been very pretty but the burden fell on Greek banks, but the bond buy back has been sufficiently successful. Greek bonds have continued to rally, with the 10 year yield off another 62 bp to 12.58%, seemingly rewarding most investors who did not participate, which now appear to be foreigners and officials.
Elsewhere, Spain received the funds for its bank recapitalisation scheme and as part of the conditionality, they expect troubled banks to sell non core assets and close branches, thereby laying off employees. In addition, they will have to transfer assets to the "bad bank", the mechanism establish in haste to deal with the troublesome problem of pricing "toxic assets".
They write, it may not have been very pretty but the burden fell on Greek banks, but the bond buy back has been sufficiently successful. Greek bonds have continued to rally, with the 10 year yield off another 62 bp to 12.58%, seemingly rewarding most investors who did not participate, which now appear to be foreigners and officials.
Elsewhere, Spain received the funds for its bank recapitalisation scheme and as part of the conditionality, they expect troubled banks to sell non core assets and close branches, thereby laying off employees. In addition, they will have to transfer assets to the "bad bank", the mechanism establish in haste to deal with the troublesome problem of pricing "toxic assets".
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