January 24, 2011 / 9:24 AM / 9 years ago

EURO GOVT-Market calm over Irish upheaval; bonds, CDS steady

LONDON, Jan 24 (Reuters) - Investors took the weekend’s Irish political upheaval in their stride on Monday with credit default swaps and bond yields showing little reaction to the breakdown of the country’s coalition government.

Ireland’s junior coalition party withdrew from Prime Minister Brian Cowen’s government on Sunday, signalling the end of a crisis-riddled administration and hastening an election due on March 11. [ID:nLDE70M0AH]

“There’s a general conviction that whoever is in charge in Ireland will abide by the agreements set out with the EU and the IMF. There’s a consensus view within Ireland that something has to be done, that there needs to be an austerity policy,” said Kornelius Purps strategist at Unicredit in Munich. The Irish/German 10-year bond yield spread IE10YT=TWEB DE10YT=TWEB was little changed against Friday’s levels at 575 bps. The cost of insuring the country’s debt against default edged up 3 bps to 600 bps.

Reporting by William James

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