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Investors flee from Ireland bonds

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HB FRANKFURT. The Irish government bonds have fallen sharply on Monday under pressure. The ten year note slipped in the tip by 74 ticks at 84.89 points. Accordingly, the yield climbed to 7.175 percent from 7.057 percent on Friday evening. This widened the distance from the spread between the Irish to German bonds by twelve basis points to 467 base points.

A real trigger for the sales of the Irish dealers are not making loans. In London and Frankfurt, it was said, due to holiday (All Saints) low conversions prefer the Bund future mainly for technical reasons. The futures contract climbed by up to 65 ticks at 129.88 points. The Bund futures underlying the ten-year government bond yielded 2.468 percent on Friday again less than 2.51 percent.

One thing is certain: the distrust of highly indebted countries such as Ireland and Greece in the past few days has grown significantly. This is due to the disappointing outcome of the EU summit on the stability of the euro. "Much is still in limbo, and the decisions of the Summit are far short of the proposals of the EU-Commission, Torge Middendorf, an analyst said the euro-zone at WestLB.

At the summit of EU leaders in Brussels had Chancellor Angela Merkel and French President Nicholas Sarkozy, a change of contract for a permanent Euro-shield enforced – according to estimates by analysts, the only plus point of the summit. "The idea that an alternative mechanism to exist after 2012, is the only tangible detail," said Commerzbank Devisenanalystin Antje Praefcke.

Analyst Middendorf criticized that continue to decide the Treasury to impose sanctions on member countries with lax financial management. "As sinners judge sinners. The decision on sanctions should be located at an external institution."

Critically also, the planned participation of private creditors, if it comes in the future to the rescue of over-indebted countries. "The manager looks at his stocks and says that I can not answer my savings over and sold," said UniCredit analyst Kornelius Purps. "When do all it can come back to the turbulent scenes."

The distrust of investors over government bonds from Ireland and Greece has already increased to Friday. "All try again creating risky move out," said an analyst.