© Dukascopy Bank
- Padhraic Garvey, head of developed markets debt strategy at ING Bank NV
France and Spain, both downgraded by Standard & Poor's last week, paid lower borrowing costs on Thursday, compared to their previous auctions, a sign the ECB's refinancing operation alleviated market concern over the Europe's debt crisis.
"They are both good strong auctions," said Padhraic Garvey, head of developed markets debt strategy at ING Bank NV in Amsterdam. "Spain is showing the market there's ample demand for their paper. The result is perfectly in line with the sentiment we've see over the past couple of weeks. The ECB measures obviously help."
"The fact that there appears to be firm demand across the [Spanish] curve...supports the notion the ECB's liquidity operations are resulting in a general improvement in market sentiment as regards Spain," said Richard McGuire, senior fixed-income strategist at Rabobank.