Mixed bag

There is a bit out there for everyone today and not a lot going on. Overnight and the weekend we got news that Japan has had another bad quarter in terms of economic growth in that it dropped .9%, perhaps not all that unsurprising seeing as it is involved in a fairly bitter dispute with their trading partner and neighbour China over ownership of the Senkaku islands.

Elsewhere Greece managed to get their latest austerity budget through their parliament but I fear the clock is ticking  for them, this week sees a Eurogroup meeting tonight and a highly anticipated short term funding auction from the Greeks to try and keep the lights on. This Friday Greece will be attempting to raise approx EUR3bln of short term bills (3-month) on Friday and this is going to be eagerly watched by most to see if they can get it done. If not it will potentially be lights out for Greece as they more than likely will not be able to fund themselves day to day.

In complete contrast but keeping it on terms of debt raising I just heard via Twitter that the ESB (Irish semi state electricity company) had massive demand for an issuance of seven year debt. They were attempting to raise EUR500mln and reportedly received bids for close to EU6BLN so very much oversubscribed here. Great sign for Ireland and shows that we are been taken seriously and in demand by international investors albeit who are looking for a good yield on a cash producing low risk venture but still a positive sign none the less and certainly puts the country on course for a well received full return to international debt markets which I think is scheduled for early 2013.

Like I say overall its a mixed bag in terms of news flow and with the US on a bank holiday today and an EU meeting tonight not expecting any fireworks. Worth keeping a closer eye on the Greece situation if you have tuned out of it of late feels to me like trouble is brewing again and this time it may come to a point of no return. A lot of the “risks” of a Grexit have been dealt with it or at least contingency planned for by now ( only took 2-3 years!) so perhaps it is not such an economic shock if Greece were to exit now? That is the big question have the EU done enough to absorb a big economic shock….only time will tell.

http://online.wsj.com/article/SB10001424127887324894104578113273336220236.html?mod=WSJUK_hpp_MIDDLEThirdNews

 

 

 

 

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