AIRLINK 62.48 Increased By ▲ 2.05 (3.39%)
BOP 5.36 Increased By ▲ 0.01 (0.19%)
CNERGY 4.58 Decreased By ▼ -0.02 (-0.43%)
DFML 15.50 Increased By ▲ 0.66 (4.45%)
DGKC 66.40 Increased By ▲ 1.60 (2.47%)
FCCL 17.59 Increased By ▲ 0.73 (4.33%)
FFBL 27.70 Increased By ▲ 2.95 (11.92%)
FFL 9.27 Increased By ▲ 0.21 (2.32%)
GGL 10.06 Increased By ▲ 0.10 (1%)
HBL 105.70 Increased By ▲ 1.49 (1.43%)
HUBC 122.30 Increased By ▲ 4.78 (4.07%)
HUMNL 6.60 Increased By ▲ 0.06 (0.92%)
KEL 4.50 Decreased By ▼ -0.05 (-1.1%)
KOSM 4.48 Decreased By ▼ -0.09 (-1.97%)
MLCF 36.20 Increased By ▲ 0.79 (2.23%)
OGDC 122.92 Increased By ▲ 0.53 (0.43%)
PAEL 23.00 Increased By ▲ 1.09 (4.97%)
PIAA 29.34 Increased By ▲ 2.05 (7.51%)
PIBTL 5.80 Decreased By ▼ -0.14 (-2.36%)
PPL 107.50 Increased By ▲ 0.13 (0.12%)
PRL 27.25 Increased By ▲ 0.74 (2.79%)
PTC 18.07 Increased By ▲ 1.97 (12.24%)
SEARL 53.00 Decreased By ▼ -0.63 (-1.17%)
SNGP 63.21 Increased By ▲ 2.01 (3.28%)
SSGC 10.80 Increased By ▲ 0.05 (0.47%)
TELE 9.20 Increased By ▲ 0.71 (8.36%)
TPLP 11.44 Increased By ▲ 0.86 (8.13%)
TRG 70.86 Increased By ▲ 0.95 (1.36%)
UNITY 23.62 Increased By ▲ 0.11 (0.47%)
WTL 1.28 No Change ▼ 0.00 (0%)
BR100 6,944 Increased By 65.8 (0.96%)
BR30 22,827 Increased By 258.6 (1.15%)
KSE100 67,142 Increased By 594.3 (0.89%)
KSE30 22,090 Increased By 175.1 (0.8%)

 LONDON: German Bunds rose on Monday and bonds issued by euro zone's most indebted sovereigns were expected to come under renewed pressure after a mass downgrade by Standard & Poor's left the bloc more vulnerable to the debt crisis.

S&P downgraded on Friday the ratings of Italy, Spain, Portugal and Cyprus by two notches and the standings of France, Austria, Malta, Slovakia and Slovenia by one notch each. Germany's triple-A rating remained intact.

The downgrade, although expected, raises concerns about the triple-A rating of the euro zone's EFSF bailout fund, adding to doubts that the bloc's anti-crisis tools were powerful enough.

The fact that Germany is still top-rated, despite warnings last month from S&P that it could be downgraded by a notch, is expected to put further widening pressure on yield spreads.

Further hurting the confidence in the currency union's chances to muddle through the crisis, negotiations on a debt swap by private creditors seen as crucial to avoid an unruly Greek default broke up without agreement in Athens.

"I just want to be long Bunds, five-years and 10-years. They're going up," one trader said.

At 0704 GMT, Bund futures were 13 ticks higher on the day at 140.07, having hit a record high of 140.23 on Friday. Ten-year cash yields were 1.5 bps lower at 1.757 percent.

Investors will be on alert for European Central Bank forrays into the secondary market, with the perception of its commitment to keep borrowing costs for Italy and Spain affordable seen as key to prevent a fast escalation of the crisis.

Italy takes a break from supply this week, but Spain comes to the market with sales of 2016, 2019 and 2022 bonds.

Copyright Reuters, 2012

Comments

Comments are closed.