European stocks are holding onto modest gains this morning despite the rising tensions among European leaders ahead of a crucial summit in Brussels aimed at calming global investor concerns over the region's two-year debt crisis.
German Chancellor Angela Merkel flatly rejected a growing Europe-wide demand for shared debt issuance, or so-called Euro bonds, as means with which to tackle the crisis. Her stance may increasingly isolated Germany on the issue of debt mutualisation as borrowing costs for Spain, Italy and other peripheral European nations continues to rise.
Italy today sold 6-month Treasury bill at a yield of around 3 percent. That's the highest it's had to pay since December and is more than double the 10-year funding costs of Germany. Spain's Prime Minister Mariano Rajoy told parliament this morning that his own nation's funding costs could not be sustained in the long term and vowed to call upon European leaders to ease market tensions at tomorrow's Brussels summit.
Here in the UK, Britain's economic recovery continues to look fragile after figures from the British Bankers' Association showed mortgage lending for the month of May fell to the lowest net level since records began after the smallest number of new home loan approvals since April of last year.
Written & Presented by Martin Baccardax