JPMorgan Chase forecasts further widening of Greek, Portuguese and Irish bond spreads, as the European leaders’ agreement failed to calm bond markets, according to Bloomberg.
“The significant EU agreements reached this month have not been enough to spark investor demand for the most troubled peripherals,” JPMorgan analysts said in a report. “Portugal is moving ever closer to an inevitable bailout, and the prospect of further major bank recapitalizations still hangs over Ireland.”
However, Spanish and Italian bonds will fare better as investors discriminate between so-called “near peripherals” and “far peripherals,” the analysts said.
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