Promissory note remarks spark tension

There was a slight nervousness in bond markets yesterday after the ultra-conservative Bundesbank president suggested the promissory note deal may breach ECB rules.

This was followed by ECB president Mario Draghi repeating his remarks of last week that they would examine further the deal. He is attending the G7 finance ministers' meeting in Moscow which is also being attended by Finance Minister Michael Noonan representing the EU.

German 10-year bonds rose for a second day after the remarks by Jens Weidmann who is a staunch defender of the ECB not being engaged in anything that could be seen as monetary financing.