France and Spain on Thursday sailed through their first bond market tests since Standard & Poor's downgraded their credit ratings last week, a sign that politicians and central bankers have at least temporarily stemmed the spread of Europe's debt crisis.
Worries about the 17-nation eurozone have receded since the start of the year, with stocks rallying consistently and bond yields — the rate countries pay to borrow — sliding.
Analysts warn, however, that those gains may simply be riding an absence of bad news — a looming recession could hinder efforts to slash deficits while Greece depends on a deal with banks to avoid a disastrous default this spring.
Spain and France held successful short-term debt auctions earlier in the week. Spain's success is at least partially thanks to the European Central Bank's massive injection of cheap money into the financial sector in December and its regular purchases of Spanish and Italian debt.
Saturday, January 21, 2012
Confidence in eurozone improves despite downgrades
I don't know what confidence would improve when the problems are still there. I think they are in the denial stage.