Euro area bonds "creep" to the top on the uncertainty of rescue

The leaders of the 17 countries in the euro area met in Brussels to agree to the economy of the Greece plans to reaffirm, announcing that the Fund currency International and Member nations would provide €109bn rescue, while private banks would add an additional $ 50 billion €.

But the inclusion of the private sector is the Greece at the risk of default and details of exactly how the rescue plan would work were not clear enough to convince investors. Adding to the uncertainty was the decision by the rating agency Moody's this morning to downgrade Greek debt to Ca - as a rating above by default.

Thus the European bond yields shot upward today. UK links pink 3pc, with the Italy and the Spain being charged FP6, Portugal 10 2pc, Ireland 11 (5pc) and the Greece of more than ten years almost 14pc.

Analysts claimed these rates, might continue to rising until concrete details are provided. Lyn Graham-Taylor, fixed the Rabobank income strategist, said that the agreement is one step larger until the market expected, but may fail unless details are made public.

"Finally people were referring to d - Word, by default.". Everyone realized this is going to happen, "he says.

But the uncertainty would cause yields to "continue to infiltrate more", he warned.

"If the details which are generally a kind of watering-down, expect, they will be, we will gradually see a risk-off gesture,"he added."". Until more concrete details emerge it y a "progressive higher sliding" in yields, because investors wary. "When you try and dig in where the 109bn is finally of, it is impossible", he said. "What money are they particularly of earlier rescue that is not yet distributed."

Details may be some time to come, even if, as Angela Merkel, said last week that the concrete plans would not be published until after the parliamentary summer recess - that could leave investors guessing until September.

There is also concern that the agreement could difficulty when she faces the German Parliament.

Michael Hewson, CMC Markets analyst, said: "in Europe the benefits in Germany began in new rescue last week for the Greece with a firestorm of critically come Angela Merkel in her apparent cellar in changes in the EFSF.".

"His former economic advisor and now head of the Bundesbank, Jens Weidmann, is one of many critics who accuse them of taking risks with the fiscal sovereignty of the Germany."

"With all changes to the EFSF requiring approval of the Parliament, Brussels agreement last week looks as if she might well have the easy bit as changes are beginning to be debated in parliaments of the EU."

"Thus, gold prices have emerged in Asia hit New Records investors seeking a safe haven far fears of a possible default and an almost certain ratings us credit downgrade, if the events continue in their ordinary sense.".

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