FOREX NEWS: New tensions in the bond market, the Greek rates up sharply

The bond market suffered Thursday morning new tensions that affected mainly the rate Greek, Spanish and Irish, signs of lingering fears of contagion from problems of public debt across the EUR zone. 

Ratings agency Moody's said Thursday in a report that the Greek financial crisis represented a significant risk of contagion to the banks of several European countries including Portugal, Spain, Italy, Ireland and the UK. Legislative elections are held Thursday in the latter country. 

The market showed nervous before the press conference of the European Central Bank (ECB), the meeting of its Board of Governors started the morning in Lisbon. President Trichet of the ECB will have to answer many questions on this topic at the traditional press conference following the board meeting, scheduled for 24:30 GMT.

 "Thursday is a decisive day for the EUR area. The press conference of the ECB should not surprise book regarding the statement to be published, but the session of questions / answers will be monitored under the microscope, "say analysts at BNP Paribas in a note. 

Mr. Trichet should be asked about the massive purchase of government bonds by the ECB, as was done in the United States and Great Britain, they say. Meanwhile, the Greek 10-year yields continued to rise: they amounted to 10.477% at 11:30 (0930 GMT), against 10.025% Wednesday evening at 1600 GMT. 

They had reached a week ago their highest level since the entry of Greece into the EUR area, to 11.142%. 

Greek rates at 2 years amounted to 15.146% 14.420% against the previous evening, a sign of fear on the future of Greece in the very short term. 

As regards Spain, who directed a program requirement Thursday, the 10-year rate progressed slightly to 4.272% against 4.196% Wednesday. 

Spain has successfully lifted Thursday 2.345 billion EUR in treasury bonds to five years, at an average rate of 3.532%, higher than in the previous issue, but satisfactory given the financial situation of the country.

 Irish rates were 5.627% against 5.563 % on the previous evening and those of Portugal to 10 years 5.855% 5.762% against the previous evening. Lisbon has successfully Wednesday to raise 500 million EURs of treasury bills six months, but at a rate four times higher that obtained in March.