Forex Flash: Peripheral European concerns linger – Deutsche Bank

FXstreet.com (Barcelona) - In Greece, the Bank of Greece Governor George Provopoulos said that the country saw deposit inflows of more than €1.5B in March despite fears the Cypriot banking crisis would cause outflows. Provopoulos said the Greek banking sector averted contagion from the Cypriot crisis by getting Greek lender Piraeus to buy Cypriot bank branches operating in Greece before they reopened after the extended bank holiday.

Meanwhile in Italy, the seemingly increasing signs of division within the centre-left party after weeks of stalled efforts by Democratic Party leader Bersani to form a government. Matteo Renzi, who challenged Bersani unsuccessfully in a party primary last year, called on the centre-left to either drop objections to dealing with Berlusconi's centre-right bloc or accept the need for new elections. Renzi appears to be boosted by opinion polls which suggest the Democratic Party could win 32.5% with him at its head compared with 28.2% under Bersani.

According to Macro Strategy Analysts J. Reid and C. Tan at Deutshe Bank, “The impasse doesn't appear to have affected Italian funding costs thus far, with bond yields still well below those seen after the election in late February.”