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Europe Day Ahead: Lingering Spanish doubts halt rally

Monday, September 17, 2012 - 02:45

Sept. 17 - Spain faces its first test this week, with a €4.5 billion T-bill auction, the first since the ECB's bond buying plan. But the question remains whether Madrid will seek a bailout.

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Spanish bond yields edged higher as Madrid -- has its first bond auctions since the ECB announced its bond buying plan. That's as tens of thousands of unused to the streets this weekend to protest against the austerity measures and tax hikes. The rally came as Spain's finance minister and the least again -- Ruled out further fiscal cuts at the meeting in Cyprus. But he did manage to set clear deadlines for structural reforms which could pave the way for a bailout request in the autumn. On Tuesday Madrid will auction up to four point five billion euros of T bills ahead of a bigger test on Thursday when -- issues that long that they took notes. Well -- ahead of the strategic advisory group at Credit Suisse is confident the country is on the right track. Let's tell you risk a new group that is to say the risk of Spain and Italy leaving the aura. The risk of that bond yields spiraling high that tie jewelry -- extreme event risk. Has been significantly reduced over the lost two to three weeks. Also on the agenda at this weekend's finance ministers may take Austria's -- -- warning that Athens won't get any more money just a few more weeks to meet -- -- terms. Speaking at an annual press conference in Berlin the German Chancellor Angela Merkel said her heart bleeds for Greeks facing hardship in the eurozone crisis. But she argued -- political coordination would be achieved by the end of the yet. Forget if it's not finished double. I don't sense that we must take. As this crisis must be so gloves and basically we need to do we didn't do sufficiently in the year I was entities and namely -- more coordination. A more accountability yet. And that's all we have take Capital One. For the next months until they do is send a -- Disco corporation in the -- Well tomorrow's 2013 Dutch budget likely to be a nonstarter. Until the coalition takes shape. Last -- old Liberal Party leader mark -- to return to power but he faces weeks if not months of talks to form a government. Most likely would close rival late but the caretaker government is unable to push through any major policy changes. Until then. And a quick look at need dated diary the -- EW economic sentiment data due out on Tuesday morning. It's expected to show that confidence remained weak in September that. While in the UK inflation biggest oldest expected to edged down to 2.5 percent compared to two point 6% this time last year. -- that's his stick with Reuters on the inside of apple on Reuters dot com we'll speak to the French finance minister on whether he -- Spain should seek -- -- I'm Nigel Stephenson this is sources.