Tuesday, 10 July 2012 14:22
LONDON: German Bund futures hovered near one-month highs and Spanish 10-year yields remained over the 7 percent mark on Tuesday after a meeting of euro zone finance ministers produced little to improve appetite for riskier assets.
Continued caution on the part of investors is likely to benefit higher-yielding, non-peripheral markets like France or Belgium as well as safe-haven German debt, with demand for Italian and Spanish bonds remaining fragile.
Earlier on Tuesday, euro zone ministers agreed to grant Spain an extra year, until 2014, to reach its deficit reduction targets and set the parameters of an aid package for its banks that it is hoped will prevent Madrid needing further aid.
But with 10-year Spanish yields above the key 7 percent level beyond which countries such as Portugal or Ireland were eventually forced out of capital markets, investors continued to fret about a potential sovereign bailout.
Market attention is now focused on a German ...