German Court ratify ESM Plan

The German Constitutional Court has ratified the eurozone bailout package. The bill will now be signed into law.
At issue was the legal matter of whether the permanent bailout fund which the eurozone nations had established (the European Stability Mechanism) was in keeping with the German constitution.
The ESM is a scheme which allows joint funds to be spent buying debt directly from governments. These governments would request help after finding it too expensive to borrow from the market. Unlike the OMT, its potential size is limited to €700bn. Germany will take on 27.15pc of these contributions, giving it a maximum liability of €190bn. Of this sum, €80bn (or €21.72bn for Germany) must be paid up front to the ECB.

We had quite a wild move on the back of this as the Bund initially went bid before selling of hard to reach a low of 139.24. The Euro also breached 129, as optimism has grown greatly. Couple this with likely QE out of the FED tomorrow, has led to dollar weakness and a big drop in the dollar index.

Spread wise we have steepened as you would expect with the big fall in the Bund, but the shorter end of the curve has stayed pretty stagnant with only a slight upward move in the Euribors.
Below is some video analysis on the past weeks moves.