Ireland gets to live for another 245 days

Ireland sold 3 month and 245 day paper at yields well below that of two weeks ago and at bid to covers that were very strong (10.1 for the 245 day issue). In light of the concerns that flared up a few weeks ago on the rising cost of the Irish bank bailout, its comforting to see strong demand but the maturities are very short term and thus the auctions aren’t the best measure of sentiment towards Ireland’s finances. 5 yr CDS is narrower by 8 bps but to a still elevated 316 bps and Irish stocks are up by almost 1%. Highlighting the economic growth differences in Europe, certainly as expressed by the credit markets, German consumer confidence rose to the highest since Oct ’09 while Italian consumer confidence fell to the lowest since Mar ’09. A UK retail sales index was much better than expected and rose to the highest since Apr ’07. A day before Bernanke speaks, gold is just $20 from an all time record high.

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