The risk premium was 140 points about ten days ago

Concerns about the quality of signature by the "peripheral" of euro-zone States are resurfacing. After a brief lull, the movements observed last week again hosted markets yesterday. The difference between the rates at 10 years of the Greece and the German equivalent, which serves as a reference for the European bond market grew to nearly 175 basis points. The risk premium was 140 points about ten days ago. The performance of the 10-year Greek now flirts with the 5 threshold. The differential between the Irish and the Bund was also up slightly yesterday in the meeting. In addition, CDS (credit default swaps") of the Greece and the Ireland are are strained, 188 and 162 respectively basis points. The CDS give an indication of the cost of insurance against the risk of a debt default. The Germany was in decline.

The strong decline in the aversion to risk since the month of March caused a movement of convergence between the fragile. Of many investment strategies are also supported on this trend. At the beginning of the year, less well rated States risk premiums increased had caused reactions in the political sphere. The market began to reflect an extreme scenario of collapse of the euro area. These new divergence signals are therefore very monitored.

The note by the Greece in question

The Greece concentrates the attention. His score has been degraded by Fitch and placed under surveillance by Moody's in October, after the new Government has indicated that the deficit could reach 12.5 of GDP this year, more than double what was initially announced. But the risk premium of the Greek State has particularly rebounded recently on fears of a fall in demand for domestic banks for sovereign debt, while they have increased their purchases this year.

In addition to the question of the eligibility of the Greek State bonds to the operations of the European Central Bank for new degradation of Greek note, investors questioned the effect of tightening the tap of the liquidity of the ECB. The subject of the phasing out of non-conventional programs is discussed more frequently by the representatives of the European Institute of emission. The disappearance of lending operations to 1 year after that of December, is already almost acquired. However, if banks to finance more easily and have more as available resources, they may have difficulty in absorbing the flood of paper of State expected in 2010.

Increase in the risk premium

According to estimates of BNP Paribas, the Greece should still raise EUR 45 billion next year, after 61 billion this year, and the Ireland 25 billion euros, after 34 billion. Especially, in its whole, the euro zone should place about 1,000 billion euros of debt, or more this year. This configuration of lower liquidity and higher emissions harm especially papers whose signatures are the most vulnerable to German or French titles. "Given that States tend to agree the market for the debt more strongly in the first months of the year, caution is recommended until early 2010," warns the team of Barclays Capital, which does not mean that the Greece risk premium rises to 50 basis points.

Yesterday, the Greek and Irish rates were, while the rest of the European bond market posted a moderate rise, after contrasting statistics. Later in the day, the performance of the German rate 10-year relaxed 2 basis points to 3.24, and the French OAT to 10 years in 4 points to 3.50.