Irish/German bonds spread have narrowed significantly in the wake of the announcement by the Irish government of fresh capital injections into the countries troubled banks. The move will require more austerity from Irish taxpayers in order to fund the bailouts without turning to Europe for a bailout.
Spreads between Irish 10-year gilts and 10-year German bunds have narrowed to 453 bp after the news compared to 465 bp late yesterday, a sign of receding fears.
