June 19 - Despite the political and financial turmoil in Europe, Reuters bonds correspondent Will James says markets have low expectations of Wednesday's policy decision from the U.S. Federal Reserve.
Greece's political drama still Centre stage on a diet high tension for financial markets. European unity under pressure it seems as never before Spain's borrowing costs hitting new record highs. An investor confidence even in power house Germany posting its sharpest decline in a decade. Madrid forced to pay more than 5% to sell 2.4 billion euros in twelve month bills the highest yield since the birth of the Europe. And the get harsher test of investor appetite -- on Thursday when Spain -- two billion euros in adults. Well with me here is that -- says bonds correspondent well -- -- well thanks for joining us a very busy day as Spain under ever growing pressure with the tenure you'll still about 7% today's election. Reflecting on -- I think. So I mean they've done a solid it generally has been auctions I priest can still so bills that's not the best indicator but the yields were pretty Orchard -- sentence is is -- huge cost mystical to swallow. -- bones came off as a result of facts that suggest there is some people expecting -- west so you. I'm meanwhile -- a double whammy from option Germany is that the WR and minus sixteen point nine the constitutional court also ruled that medical. Didn't consult enough on the on the creation of formation of the SN. Yet the great news but I think the reaction was pretty new to to to both of dollars and German debt. Simply because there's a big cloud out Madrid. People just looking at the same type and it has buttons and it still seen as a separate relative. Eyes and ears to listen to just gonna follow the money that thinking it's still safe despite any data that comes to do well I think for the time being until we get some kind of resolution house. What what he's quite good news that you Kasey got so quite dramatically -- what was the reaction in the go look at what the market people telling -- yes -- had deals we have just rise as a result of that I think it this is speculation that the people Q. This -- that's what my case it that they should go out there that just wants to pass a week to wait for that one meanwhile of course the -- looming over everything is that one theme in the bond markets -- system that it -- -- -- -- -- -- I think it -- -- assisting -- -- -- US contacts. That we -- -- in -- it seems -- people -- expecting an extension -- Operation Twist. Which is not a silver bullet that people in the markets and it can. Four. People have talked about a big Central Bank coordinated action if Greece went the wrong way it didn't and so I think that that might give that out at trial on a -- funds. So -- of the week you get that Iraqis that media conferences is still relatively new thing than. To expect any real information coming from them. But I think so I think expectations are pretty without. They know that there in this new thing. That pretty cautious from space. Okay well thanks very much they've asked that he's -- up from us an album to join -- every weekday at this time for a snapshot of what's driving. Financial markets and why I'm Nigel Stephenson pace is what is.