The FT reports on capital market perspectives in relation to Ireland’s “clean exit” - here.
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5 Responses to “Ireland’s comeback story runs into growth test”
It’s good news.
And the markets are roaring
But earnings growth isn’t driving them
So it’s going to hit the rocks at some stage
Now, will Ireland be out of the mire by then?
And, if so, what is going to drive the growth ?
Central Bank data for September puts non-resident holdings of Irish Government bonds at €62bn, down from over €68bn earlier in the year , compared with a total outstanding of some €115bn or €90bn if one excludes the bonds issued to Dame street for the Prom notes. 10-year yields have had difficulty falling below 3.5% and the spread to bunds has not been able to breach 170bp, implying an investor reluctance to acquire Irish debt at a tighter spread. On my calculations that yield level is also consistent with Ireland’s S+P rating, which would suggest that a narrower spread would require a ratings upgrade or at least the strong expectation of a move.