The growing likelihood of an imminent bail-out package for Ireland helped trigger a burst of confidence in the markets, sending equities, commodities and the euro higher and dulling the allure of US and German government bonds.
Further positive factors included a triumphant return to Wall Street for General Motors and an easing of worries about higher interest rates in China, although the chief catalyst came from Dublin.
Patrick Honohan, the governor of Ireland’s central bank, said that Dublin was highly likely to ask for a loan of “tens of billions” of euros from the European Union and the International Monetary Fund. James Knightley at ING said: “It increasingly looks as though it is not about the ‘if’ but only the ‘when’ Ireland will get a bail-out.”