The markets want to accept the latest Greek recovery plan, but they will have to see to believe. In other words, they will need to figure out how the contributions from the private sector are going to materialize and bring some 109 billion euros contributed by 17 countries helping with the public aid to Greece.
Because the beneficent agreement will continue the bullish sentiment of the old continent, yet with more moderate spikes than those seen on Thursday, when the markets registered substantial rallies in the wake of the recent EU agreement.
London, Berlin, Paris: all the European indicators closed the trading day lukewarm at best. The Ibex in particular rose dramatically to register its maximum intraday level above the psychological threshold of 10,200 points. But it began to plunge and ended the day ahead by just 0.4%. Likely because investors decided to grab profits as doubts about the second aid package increased. These doubts have been dissipating investor euphoria since talks about another aid package began.
The same happened with the Spanish risk premium during a rather relaxed session, which rose little by little and did not slow down until nearly the close of the session when it registered 300 basis points (its highest level of the day), but dropped back to 294. This is far below the 367 basis points registered last June 18 2010, but also far from the 234 registered at the beginning of this month. Ultimately the yield on 5-year bonds increased nearly 0.4%.
