Euro Bond Markets

According to the FT this morning:

The euro has displaced the US dollar as the world’s pre-eminent currency in international bond markets, having outstripped the dollar-denominated market for the second year in a row.

The data consolidate news last month that the value of euro notes in circulation had overtaken the dollar for the first time. Outstanding debt issued in the euro was worth the equivalent of $4,836bn at the end of 2006 compared with $3,892bn for the dollar, according to International Capital Market Association data.

Outstanding euro-denominated debt accounts for 45 per cent of the global market, compared with 37 per cent for the dollar. New issuance last year accounted for 49 per cent of the global total.

Now this is all fine and well, and as it should be, but given the importance that euro denominated debt has now assumed we had all better keep our fingers crossed that there is no major crisis in the Italian government's willingness and ability to maintain its sovereign debt obligations.