LONDON, Sept 19 (Reuters) – Central bank action helped push
down a barometer of counterparty risk in the euro zone this week
to its lowest since the U.S. subprime crisis started in 2007,
but has done little to breathe life into frozen money markets.

The Bank of Japan on Wednesday became the latest central
bank to ease monetary policy, by boosting its asset-buying
programme. Its move came on the heels of the Federal Reserve’s
aggressive support measures and after the European Central Bank
pledged potentially unlimited, though conditional bond buying.

LONDON (Reuters) – Investors buying into a rally in Spanish bonds may need a strong stomach over the coming weeks as Madrid’s reluctance to seek a bailout could force debt prices lower in the short term.

Bond yields have tumbled in recent weeks as some foreign investors, largely absent from Spanish markets in recent months, have started buying in anticipation of the European Central Bank purchasing bonds under a newly agreed support mechanism.

LONDON, Sept 14 (Reuters) – German 10-year government bond
yields rose above their 200-day moving average for the first
time in 14 months on Friday as fresh stimulus from the U.S.
Federal Reserve rounded up a bright week for riskier assets.

The Fed said it would pump $40 billion into the U.S. economy
each month until it saw a sustained upturn in the jobs market
and extended the time-frame in which it would keep interest
rates near zero.

LONDON, Sept 14 (Reuters) – Italian government bond yields
fell below five percent on Friday for the first time since late
March as a new batch of economic stimulus from the U.S. Federal
Reserve added to the brightest week for efforts to quell the
euro zone’s debt crisis this year.

The Fed said it would pump $40 billion into the U.S. economy
each month until it saw a sustained upturn in the jobs market
and extended the time-frame in which it would keep interest
rates near zero..

LONDON, Sept 13 (Reuters) – German government bonds rose on
Thursday as Greek concerns gave investors an excuse to pile back
into safe-haven debt after sharp selling in the previous session
and investors braced for more monetary support from the U.S.
central bank.

The main focus was the U.S. Federal Reserve policy
announcement due at 1630 GMT, with the central bank likely to
launch a third round of bond purchases – dubbed QE3 – to try to
breathe life into the sluggish economy.

LONDON, Sept 12 (Reuters) – A barometer of dollar funding
risk reached its best levels in more than a year helped by the
prospect of European Central Bank intervention but was seen
stabilising from current levels.

The ECB’s promise to buy bonds of struggling euro zone
states, as well as expectations the Federal Reserve may soon
embark in a third round of quantitative easing, has improved
sentiment towards riskier assets generally, underpinning
European stock markets and Italian and Spanish sovereign debt.

LONDON, Sept 11 (Reuters) – German Bund futures were little
changed in late trading on Tuesday with markets cautious a day
before a ruling by the country’s top court which is expected to
give the go-ahead to the euro zone rescue fund, albeit with
tough conditions.

Germany’s Constitutional Court said it would not postpone
Wednesday’s ruling on the legality of the euro zone’s bailout
fund despite a new challenge by a lawmaker from Chancellor
Angela Merkel’s party which threatened to delay proceedings.

LONDON, Sept 10 (Reuters) – The prospect of European Central
Bank bond-buying to curb government borrowing costs kept Spanish
yields below the 6 percent mark on Monday, although investors
took some profit on a rally stretching back some seven weeks.

Spanish yields have eased sharply since ECB chief Mario
Draghi promised in July to do whatever it took to defend the
euro and the ECB’s announcement of potentially unlimited bond
purchases last week has added to that run.

LONDON, Sept 7 (Reuters) – Spanish 10-year bond yields fell
below 6 percent for the first time since May on Friday as an ECB
plan to buy government debt was seen as a first step towards
restoring faith in the euro zone’s ability to tackle its debt
crisis.

European Central Bank chief Mario Draghi committed the bank
on Thursday to potentially unlimited buying of bonds with
maturities of up to three years, in exchange for tough
commitments from recipient countries, including having to ask
for formal help first.

LONDON, Sept 6 (Reuters) – Money markets are still pricing
in another ECB interest rate cut this year even though
expectations have been scaled back slightly after the bank’s
chief provided few clues on future monetary policy.

The European Central Bank’s meeting was dominated by the
launch of a new and potentially unlimited bond-buying programme
to bring down the borrowing costs of struggling euro zone
sovereigns, with official interest rates taking a back seat.