Li Keqiang, the Vice President of China, wrote an article in Spain’s largest newspaper, El Pais, and pledged to buy Spanish public debt. This may well help the lower the yields, and allow cheaper refinancing for Spain throughout 2011. Spain has a lot of money to rollover / pay back, especially at the beginning of the year. This consists of government, regional communities and municipalities.
Spanish ten-year bond yields opened the year very stable – at around 5.44%, almost unchanged from their level at the end of 2010. Most European markets are closed today, in a long New Years’ weekend.
Here’s a quote from AFP:
“Since China is a responsible investor country in the long-term on the European financial markets, and in particular in Spain, we have confidence in the Spanish financial market, which has been translated into the acquisition of its public debt, something we will continue to do in the future,” he said.
This may well be merely a verbal gesture – Li Keqiang begins a visit in Spain, and will then continue to Germany and Britain, so it’s still to be seen if and how deep the Chinese will intervene in the European debt crisis.
EUR/USD is recovering – it crossed the 1.3334 line, but is till below the closing number of 2010 – 1.3383.
Share
