Monday, May 28, 10:00 a.m.
Asian markets rallied fractionally Sunday night on reports that election polls in Greece show the pro-austerity, ‘stay in the euro-zone’ New Democracy party has moved ahead in pre-election polls in Greece.
The Asian gains were mostly only fractional, Japan up 0.2%, Hong Kong up 0.5%. But Australia was up 1%, China’s Shanghai Index closed up 1.2%, and Asia’s advance ended a three-day losing streak that had many Asian markets at new correction and bear market lows.
European markets, which are closer to the problems and potential solutions, were also up earlier but have given back the gains, at least at the moment.
It seems there’s more going on than just an encouraging poll of the electorate in Greece in advance of its June 17 election.
For instance, reports this morning are that Spain’s cost of borrowing has jumped again, raising the concern of markets that Spain could be forced to become the next euro-zone country to need an international bailout.
The yield on Spain’s 10-year bonds are rising from 4.7% earlier this year, approaching 6.5%, nearing the 7.0% level that is seen as unsustainable. (Ireland and Portugal were frozen out of capital markets and forced to seek bailouts after the yield on their 10-year bonds reached 7%).
Meanwhile, the U.S. market is closed for the Memorial Day holiday, and opens tomorrow to a week of numerous potential market-moving economic reports.
I’ll be back in the morning with the regular Tuesday morning post.
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