Irish bonds may be rallying but life is "very tough" - Citigroup

As Irish bonds extend their rally, the gains for investors may be disguising a different story and Ireland faces "an almost impossible task", says Citigroup.

All of the optimism that Ireland can raise money in the markets and avoid a debt restructuring is premature as the nation struggles to emerge from its worst recession in modern history, said Michael Saunders, Citigroup’s head of European economics in London.

As Irish bonds extend their rally, the gains for investors may be disguising a different story.

The yield on Ireland’s benchmark 2020 bond fell below 5.20 per cent this week for the first time since the country’s international rescue in November 2010. The debt is the second-best performing in the euro region this year, trailing only fellow bailout recipient Portugal.

All of the optimism that Ireland can raise money in the markets and ...