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| Eurozone crisis live: Greek politicians scramble for votes | Eurozone crisis live: Greek politicians scramble for votes |
| (40 minutes later) | |
| 9.17am: And sticking with bond yields for a second, Ed Conway at Sky gives us some historical context to Spanish borrowing costs (now up at 6.66%). | |
| Bailout hangover worsens: Spanish govt borrowing rates hit 6.6%. If this continues cld hit highest level since mid-90s twitter.com/EdConwaySky/st… | |
| — Ed Conway (@EdConwaySky) June 12, 2012 | |
| 9.05am: In the case of Italian bond yields (see 8.49am), economist Shaun Richards notes that investors are increasingly worried about Italy's contribution to Spain's bailout. | |
| More and more are focusing on the extra 19.2 billion #Euros that Italy will guarantee to Spain as her ten year bond yield rises to 6.1% | |
| — Shaun Richards (@notayesmansecon) June 12, 2012 | |
| 8.49am: Spanish and Italian bond yields - or borrowing costs - are on the rise. | |
| Italian yields are up at 6.17% (their highest level since January), while Spanish yields have climbed to 6.53%. | |
| Bond investors are nervous that the EU will use the european stability mechanism to lend money directly to Spain. That would push existing holders of Spanish government bonds down the pecking order, ie the ESM will be paid back before them in the case of a default. Gary Jenkins of Swordfish Research reflected on the situation in his morning comment: | |
| I wonder if yesterday's bond market reaction will lead to a change of tack from the EU. They do not seem to understand the basic principle that they are reliant upon bond investors and thus they should be trying to encourage them to buy, not discourage them. There was unofficial confirmation that the ESM would be used and subordination would take place although funny enough late in the afternoon as Spanish and Italian yields got smacked there were headlines on Reuters suggesting that maybe there wouldn't be subordination and maybe they could use the EFSF initially before passing the loans onto the ESM….it really does look like they didn't even consider this aspect of the bailout and there are times when they do almost appear to be making it up as they go along. | |
| 8.27am: There are conflicting messages coming out about Spain's banking bailout. Spanish prime minister Mariano Rajoy says the deal comes with no conditions, while the European Commission has said Spain will not receive any special treatment. It seems the vice-president of the EC was unwilling to clarify things when questioned by Dow Jones reporter Matina Stevis last night. | 8.27am: There are conflicting messages coming out about Spain's banking bailout. Spanish prime minister Mariano Rajoy says the deal comes with no conditions, while the European Commission has said Spain will not receive any special treatment. It seems the vice-president of the EC was unwilling to clarify things when questioned by Dow Jones reporter Matina Stevis last night. |
| Last night in Strasbourg, I asked Olli Rehn if aid wd be withheld from Spain should it miss its 2012 5.3% deficit target. He didn't respond | Last night in Strasbourg, I asked Olli Rehn if aid wd be withheld from Spain should it miss its 2012 5.3% deficit target. He didn't respond |
| — Matina Stevis (@MatinaStevis) June 12, 2012 | — Matina Stevis (@MatinaStevis) June 12, 2012 |
| 8.17am: Markets across Europe are struggling to make any headway this morning, as investors continue to digest news of Spain's banking bailout. | 8.17am: Markets across Europe are struggling to make any headway this morning, as investors continue to digest news of Spain's banking bailout. |
| UK's FTSE: up 0.07% at 5436 points Germany's DAX: unchanged Spain's IBEX: down 0.4% Italy's FTSE MIB: down 0.2% France's CAC: up 0.2% | UK's FTSE: up 0.07% at 5436 points Germany's DAX: unchanged Spain's IBEX: down 0.4% Italy's FTSE MIB: down 0.2% France's CAC: up 0.2% |
| 8.09am: There's more evidence that companies are feeling the pain from the eurozone crisis. BAA's statistics this morning are particularly stark, with a dramatic drop in traffic from countries at the centre of the storm. My colleague Dan Milmo reports: | 8.09am: There's more evidence that companies are feeling the pain from the eurozone crisis. BAA's statistics this morning are particularly stark, with a dramatic drop in traffic from countries at the centre of the storm. My colleague Dan Milmo reports: |
| BAA said passenger numbers between Britain's largest airport and Greece dropped 11.3% compared with May last year, with traffic to and from Italy falling 9.2% and Spain by 2.5%. Portugal was the biggest faller, declining by 11.4%. BAA said that Heathrow carried 5.8 million people overall last month, a fall of 0.6% on the same period last year. | BAA said passenger numbers between Britain's largest airport and Greece dropped 11.3% compared with May last year, with traffic to and from Italy falling 9.2% and Spain by 2.5%. Portugal was the biggest faller, declining by 11.4%. BAA said that Heathrow carried 5.8 million people overall last month, a fall of 0.6% on the same period last year. |
| 7.59am: Good morning, and welcome to our rolling coverage of the eurozone financial crisis. All eyes will be on Spanish and Italian bond yields today, following Spain's banking bailout. And Greek politicians are campaigning furiously ahead of the elections this weekend, with Antonis Samaras and Alexis Tsipras due to speak later. | 7.59am: Good morning, and welcome to our rolling coverage of the eurozone financial crisis. All eyes will be on Spanish and Italian bond yields today, following Spain's banking bailout. And Greek politicians are campaigning furiously ahead of the elections this weekend, with Antonis Samaras and Alexis Tsipras due to speak later. |
| Italy's prime minister Mario Monti is due to meet Swiss president Eveline Widmer-Schlumpf to discuss tax. While the German chancellor Angela Merkel and her finance minister will be speaking at an economics conference in Berlin. | Italy's prime minister Mario Monti is due to meet Swiss president Eveline Widmer-Schlumpf to discuss tax. While the German chancellor Angela Merkel and her finance minister will be speaking at an economics conference in Berlin. |
| This is today's agenda: | This is today's agenda: |
| • Sweden CPI for May: 8.30am • UK industrial output for April: 9.30am • UK manufacturing output for April: 9.30am • Andreas Dombret, board member of the Bunedsbank, speaks: 11am • French president Francois Hollande speaks: 1.30pm • UK GDP estimate by NIESR: 3pm • IMF chief Christine Lagarde speaks: 3pm • Joerg Asmussen, ECB board member, speaks: 3.30pm • ECB financial stability review: 4pm • US monthly budget statement for May: 7pm | • Sweden CPI for May: 8.30am • UK industrial output for April: 9.30am • UK manufacturing output for April: 9.30am • Andreas Dombret, board member of the Bunedsbank, speaks: 11am • French president Francois Hollande speaks: 1.30pm • UK GDP estimate by NIESR: 3pm • IMF chief Christine Lagarde speaks: 3pm • Joerg Asmussen, ECB board member, speaks: 3.30pm • ECB financial stability review: 4pm • US monthly budget statement for May: 7pm |
| In the debt markets, the UK is selling five-year Treasury gilts. Austria is selling €1.1bn of 50 and 10-year bonds and the Netherlands is selling €1.5bn-2.5bn in 20-year bonds. Belgium, Greece and the US are selling short-dated treasury bills. | In the debt markets, the UK is selling five-year Treasury gilts. Austria is selling €1.1bn of 50 and 10-year bonds and the Netherlands is selling €1.5bn-2.5bn in 20-year bonds. Belgium, Greece and the US are selling short-dated treasury bills. |