News Headline Summary

Spain makes formal request for EU bank bailout funds, expects funds for bank recapitalization around Dec-12th

- Confirms request for EUR 36.968bln for 4 banks.
- Funds transfer via 5 debt series.

Reaction details (06:54)

In an immediate reaction:
- Dec-Dax spiked higher from 7467 to 7489
- Dec-Bunds fell from 142.40 to 142.07
- EUR/USD spiked higher from 1.3053 to 1.3075.

Analysis details (06:59)

- Despite this being a formality and was expected by Spain, the initial knee jerk reaction seen in several asset classes can be attributed to a mis-interpretation with some seeing this as a formal request for aid for the sovereign as opposed to just the banking system.
- Once this headline was digested moves were quickly pared and markets trade back at pre-announced levels.

03 Dec 2012 - 06:49 - - Source: Newswires

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