EU Morning Report - Eurozone misery persists

The euro commenced the week with the apparent selling pressure witnessed in Friday still around. Yields have been rising again recently, and investors need to reevaluate any optimistic scenarios they had drawn out. A main point of discussion is the effectiveness of the two long term refinancing operations (LTRO) by the European Central Bank (ECB). While the LTRO injections did help support banks that were in possession of sovereign debt, those banks in return did not lend that capital back into the markets, complicating eurozone`s economic troubles. Spain’s bond yields have been rising while Italy, considered a model of reform, faces a 1.5% decline in gross domestic product (GDP), due to austerity. Portugal’s willingness to reform encourages investors, but the figures still do not paint a shiny picture. Last but not least, Greece faces colossal and exceedingly complicated problems –socially, politically and economically - with market participants anticipating yet another round of restructuring that could be a rerun of the drama surrounding the last restructuring.