Positive sentiment yesterday was as scarce as net longs in Euro with investors realising the uncertainty in the earlier announced Spanish Banks rescue deal. Spanish Bond Yields which fell from 6.7% to 6.1% are up again today near their highs at 6.5%.The current uncertainty in the Eurozone is not just from Spain but also Greece as it goes through re-elections next week and the potential outcome of the conservatives holding office in the upcoming government and their approach to austerity measures.

Recent hours have seen Cyprus indicating that it could be looking for a bailout in the very near future which will make it the fifth Eurozone country to seek funds to recapitalise its banks. Considering the given scenario it is not a surprise that European and US equity markets are struggling to take a positive direction under heavy bearish clouds, they require a more solid effort by the ECB to calm nerves and for investors to see real growth coming out from Europe.  

Posted by Khurram Ali (kali@valbury.co.uk)