The markets have lost faith in the coalition government in the UK which means sterling will remain weak for the foreseeable future, said Lorcan Roche Kelly, chief european strategist with the US hedge fund, Trend Macro.

The NTMA will most likely issue a 10-year bond in the very near future to take advantage of the positive market sentiment towards Ireland following the agreement reached with the ECB over the restructuring of the promissory notes, says Lorcan Roche Kelly, chief European strategist with the US hedge fund, Trend Macro.

The Government is in line for a watered down deal on the €30bn Anglo promissory note after ECB sources suggested any agreement will be limited and not yield any savings to the State.

Investors piled into equities sending markets to two-year highs yesterday as most of the major macro-economic risks that threatened to derail the recovery now appear to be receding.

European investor sentiment is slowly improving, according to the Sentix Research Institute based in Germany.

The news that the giant global investment manager Franklin Templeton is the biggest holder of Irish government debt outside of the IMF and EU has put the economy in a spotlight before a series of crucial ECB/EU meetings.

The bond markets have reacted favourably to the last EU summit and Monday’s meeting of eurozone finance ministers.