European shares rose in mid-Thursday morning trade after an auction of Spanish debt went better than expected.
The auction sold 3.75 billion euros of Spanish debt at the top of the targeted range. However, yields were still relatively high, at around 5%, and will probably not budge until a clear plan is announced to tackle the eurozone debt crisis.
It comes a day after central banks – including the U.S. Federal Reserve and European Central Bank – took coordinated action to prevent a credit crunch among European banks.
Fidel Helmer is Head Trader at Hauck and Aufhaeuser…
“It is remarkably positive that the banks and states cooperated internationally to carry out this coordinated action in order to calm the markets.”
European markets were flat in early trade on Thursday. And City Index Market Strategist, Joshua Raymond, says more will need to be done to fix Europe’s ongoing debt crisis.
“Whilst it is a very significant Band-Aid and it helps to increase liquidity in the markets, the heart of the problem is still there. And that’s what requires significant fiscal surgery from European leaders, which we simply haven’t got yet.”
Investors are looking to a key meeting of eurozone policymakers on December 9 to see whether more drastic steps will be taken to stem the crisis.
Bottom line: A Spanish debt auction goes better than expected a day after central banks took action to boost liquidity, but huge questions still remain about the future of the eurozone.