Markets pay scant attention to positive news

IRELAND is once again in the international media spotlight as concerns resurface about the scale of the banking, fiscal and economic problems facing the country. This has resulted in a rise in the spread between the rates for Irish debt over benchmark issuers such as Germany.

The markets apparently perceive the Irish news flow as negative, particularly on the banking front. There is also concern that the costs of providing further support to the banking system will be reflected in this year’s general government deficit.

However, the markets are paying little attention to the flow of reasonably positive news, apart from the recent high monthly rises in the Live Register. This is an imperfect indicator of changes in employment and labour market changes will also lag other economic indicators.