Wall Street the time was also to enthusiasm

A huge "egg" of relief. Financial markets all ended on the very strong rise yesterday, after the countries of the European Union agreed on a plan of historic relief up to 750 billion to assist the countries of the euro area who need. The pressure fell significantly on sovereign bonds issued by the Greece, the Spain or the Portugal, who were at the heart of the storm. As the single currency, which had dropped to 1,2519 last Thursday, it has strongly rebounded to an iron bar in the 1.30 dollar early in the morning. The increase was a little more contained in the evening, exchanging the euro against 1,2797 dollar.

The emergency mechanism mounted jointly with the international monetary Fund (IMF) and with the intervention of the European Central Bank (ECB), supported by the major central banks in the world, will allow to "strengthen and protect the euro", welcomed German Chancellor Angela Merkel. The decisions taken Sunday are a response "to all those who try to undermine the economic and financial situation of the EU, I hope that this will be the end of the battle against speculators", said Miguel Angel Moratinos, the head of Spanish diplomacy. "What made by Europeans is actually a large not forward," said the Director General of the IMF, Dominique Strauss-Kahn's.

Surprise of investors

Markets, the relief was at the wind of panic which was before the stock markets last week. In a few hours, the violent stalls in the last days was deleted. "Policy makers of the euro area were probably surprised even the most optimistic," summarizes Carsten Brzeski, an economist at ING. In Paris, the CAC 40 jumped 9.66, to 3.720,29 points, its highest increase since November 2008. It was worn by the increase of 20 for most of the financial values. Gains were even more spectacular on the contested seats in the last days: Athens won 9.13, Lisbon 10.73, 11.28 Milan and Madrid 14.43, a historic increase to the Ibex 35! Very lively, important rebounds for seventeen months, no doubt amplified by redemptions of positions open vendors. "Even if many were convinced that European, ECB head, authorities would do all that is needed to calm, few imagined a broad plan both in the amounts and the innovation of its mechanisms," said Philippe-Henri Burlisson, Groupama Asset Management. Wall Street, the time was also to enthusiasm. The Dow Jones fell and 3.90 higher at the close, the strongest progression jounalière since March 2009.

"Buy time".

Bond markets were also the scene of spectacular movements. Performance gaps ("spreads") between the borrowing of State of the peripheral countries of the euro area and those of the Germany have suddenly melted under the effect of the interventions of the ECB, which has taken historic steps in deciding to intervene in the market of public debt. Operations of buyback of European States "began as early as the morning", confirmed the President of the institution, Jean-Claude Trichet. Immediate consequence: the rate of the Greek loans of maturity of 2 years has tightened almost 1,100 to 7,53, basis points more than 18 against last week. The rate of 10-year loan has been tightened 570 basis points, to 6.72. Sign of the renewed appetite for risk of investors, American, English, French and German State bonds saw conversely their performance somewhat soft. "This time investors consider the stabilization program properly calibrated to cope with the problems of refinancing of the States, at least for the next two years", find the economists of Crédit Agricole.

In the euphoric atmosphere, many market professionals called however for measurement. They recalled both the uncertainties hovering on the modalities of intervention of the new mechanism and fundamental problems of the countries of the euro area. "Europe found no solution, it simply overrated maps focusing on the stronger nations debt;" "without radical budgetary efforts, the problem will remain whole," said Simon Maughan, analyst at MF Global. Jean-Claude Trichet as Dominique Strauss-Kahn also did not fail to insist on the rigour which should accompany the contingency plan to avoid any recurrence. But as noted by Credit Agricole, "it was especially issue purchase order to enable Governments to provide sufficient budgetary efforts to put public debt on a sustainable trajectory without being under the yoke of the mood of the market".

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