Following the decision on Friday by the Germans to agree to separate bailouts for European banks from its respective sovereigns, outside of Spain, Ireland has been a particular beneficiary as their busted banking system is what choked the finances of its government. Ireland is readying a plan to come to market to sell debt for the 1st time since Sept ’10 with an offering of 3 month bills in the next few days. Longer term Irish yields are also falling to the lowest level since ’10. With respect to the story yesterday that Finland and the Netherlands would not agree to the ESM buying sovereign bonds in the secondary market, EU Pres Rompuy said today that “the ESM has a decision making procedure attached to it so that individual countries cannot block decisions.” In Asia, China’s PMI services index rose to 56.7 from 55.2 which was the weakest since at least Mar ’11. The RBAustralia left rates unchanged as expected at 3.5% and the AUD is rising to a 2 month high vs the US$. The CAD and Singapore$ are also near 2 month highs vs the US$. The recent US$ index rally has been more euro weakness than US$ strength.
