Forex Flash: Slovenia in focus as bailout signals mount – Investec

FXstreet.com (Barcelona) - There was renewed focus on the Eurozone periphery during the latter stages of last week as news flowed late in the London session that EU finance ministers had agreed to increase the maturities of emergency loans to Ireland and Portugal from the Euro area by seven years. However, according to the Investec Analyst Team, “The move should help to smooth the return of the two countries' to full market financing, although Portugal still looks vulnerable in this respect given the rejection by its constitutional court cast last week of various austerity measures.”

Indeed, Slovenia has become the new hot topic, as the country races to avoid the need for a financial bailout. On Friday the country's Prime Minister Bratusek said her government would send a 'stability program to EU partners by May 9 and that they would immediately start to sell off state assets, in efforts to avert growing expectations that Slovenia will be forced to seek a bailout.

“It is worth noting that the country needs to regain market access before the summer to cover maturing debt and bank recapitalization needs.” they add. Over the recent days, yields on Slovenia’s 10-year benchmark bond have risen ever closer to the 7% threshold up from below 5% on March 15 (pre-Cyprus bailout).