Now there are those who will find an explanation for the following situation: the financial market behaves like pirates, arrives and takes everything that has a value and then goes away.
Despite the International Monetary Fund it has been said on Fiscal Cliff that much remains to be done to put public finances on a sustainable path without damaging the fragile recovery. The infamous spread is shrinking all over Europe which will mean significant reforms.
Yesterday the gap between the German and Italy, ten-year government bonds fell to 275 points, the lowest since mid August of 2011 with rates now down to 4.22%. Similar is the fate for Spain with the ten-year government bonds falling below 5% from the peak of 7.61% in July 2012. As for Greece yields have closed over 11% compared to the maximum of 43.92% in 2012.
We’ll see what happens in the future but it is difficult to imagine that the descent will continue in such a linear way.