... The dramatic change in the bailout rules came after Italy and Spain forced leaders to remain at the summit overnight, blocking agreement on all other agenda items before getting a deal on short-term rescue measures...
... Investors welcomed the breakthrough, sending the euro 1.3 per cent higher against the dollar to $1.2598, its biggest daily gain in eight months.
Strains in the European government bond market also eased, with yields on Italian and Spanish bonds falling sharply. In early European trade Italian yields, which move in the opposite direction to the underlying price, fell 39 basis points to 5.81 per cent and Spanish yields fell 49bp to 6.45 per cent.
Banks also made big gains as investors reacted to the decision by European leaders to allow the rescue funds to invest directly in the continent’s biggest lenders.
Under revised rules demanded by Italy, countries that want the eurozone bailout fund to purchase their bonds – an essential way of lowering their borrowing costs – will no longer be subject to Greek-style monitoring programmes. Instead, they would simply have to maintain their EU debt and deficit commitments, though EU authorities could mandate tighter deadlines and timetables.
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http://www.ft.com/intl/cms/s/0/5513d3d4-c19f-11e1-8eca-00144feabdc0.html#axzz1zB8If45F
European stocks rallied after policy makers eased repayment rules for Spanish banks, relaxed conditions for possible aid to Italy and unveiled a $149 billion growth plan for the region’s economy. U.S. index futures and Asian shares also rose.
Banco Santander SA paced banks higher, jumping 2.9 percent, after euro-area leaders at a summit in Brussels dropped a requirement that their governments get preferred-creditor status on crisis loans to Spain’s lenders. Actelion Ltd. climbed 1.9 percent after getting U.S. approval for its Veletri drug.
The Stoxx Europe 600 Index (SXXP) advanced 1.5 percent to 248.42 at 11:05 a.m. in London, heading for a weekly increase of 0.7 percent. The benchmark gauge has gained 3.6 percent this month as Greece formed a coalition government after its second election in six months, easing concern the nation will leave the euro. Standard & Poor’s 500 Index futures added 1.3 percent, while the MSCI Asia Pacific Index rose 2 percent.
“The European summit has given a very precious chance to Italy and Spain,” said Theodore Krintas, managing director of Attica Wealth Management, which manages 100 million euros ($126 million). “They’re addressing directly the needs of both countries to reduce their funding costs. They will be addressing all other banking unification issues in a very short period of time. By European standards, this is a quick move.”
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http://www.bloomberg.com/news/2012-06-29/european-stock-futures-surge-after-eu-leaders-ease-rules.html
... Make that 3.9% at the moment, in Santander's case.
dipsydoodle (32,563 posts) 
4 replies
Euro area agrees bond support for Italy, Spain (Original post)
