Italy is under attack just twelve days after the announcement that European leaders had agreed on a new plan which included a 50% haircut on Greek sovereign bonds. Yields on Italian debt are heading towards 7%, the highest Italy has paid since adopting the Euro. 7% seems to be a magic line: once they crossed it, Portugal, Greece and Ireland found themselves forced into adjustment programs designed by the "troika" (European Commission, ECB, and IMF).
The ECB cut the European reference rate by 25 basis points (1/4%), to 1.25%, two days after Mario Draghi assumed the bank's presidency. The reduction is a major change in ECB policy and an implicit recognition of the fragility of Europe's economic situation. The ECB's decision raises the odds that Banxico will reduce the Mexican reference rate in the first half of next year.
Volatility will continue to be the defining characteristic of Mexican exchange and equity markets.
The ECB cut the European reference rate by 25 basis points (1/4%), to 1.25%, two days after Mario Draghi assumed the bank's presidency. The reduction is a major change in ECB policy and an implicit recognition of the fragility of Europe's economic situation. The ECB's decision raises the odds that Banxico will reduce the Mexican reference rate in the first half of next year.
Volatility will continue to be the defining characteristic of Mexican exchange and equity markets.
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