It was exactly one year ago that I announced the death of the Euro due to the fact that EU talks on the EFSF had stalled by 20.10.2010. Now here we are one year later and the latest official statement by French president Nicolas Sarkozy after a late night meeting with German chancellor Angela Merkel on Wednesday was only a terse "talks are stuck
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Reuters summarized:
Germany sold 4.075 billion euros in its final reopening of the September 2021 bond, bringing the outstanding amount to 16 billion euros. A new January 2022 benchmark will be launched in November. The bid/cover ratio at the sale was 1.1, below the 1.5 at the previous sale in September and the 2011 average at 10-year Bund sales of 1.61, according to Reuters data. But with a target amount of 5 billion euros -- the Bundesbank retained 0.925 billion euros -- the 4.55 billion euros of bids drawn did not match the amount on offer.
The last 10-year auction deemed a technical failure was in July. "Looking at the bid/cover and the fact that ... we're facing an undersubscribed auction it shows that when risk appetite is on the rise it's difficult for the Finanzagentur to find enough demand out there," said WestLB's Leister.
Markets have stoically ignored this tectonic shift so far with the Euro holding its levels and gold receding further to $1,610 mark. This is all insane.
