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Although the Irish government is busily reassuring investors about their economy, the indicators lately have said otherwise. Can the iShares Ireland ETF (EIRL) tell the real story?

The Irish republic’s economy shrank over the second quarter, while GDP fell 1.2%. According to BBC News, GNP, seen as a more accurate barometer, fell by 0.3%.

Matt Phillips for The Wall Street Journal reports that the difference in yields between 10-year bonds issued by the German and Irish governments rose to a fresh record high of 4.32% from 4.27%. That spread is a measure of the perceived riskiness of investing in Irish government bonds.

The spreads are also fueling concerns that Ireland is in for a double-dip recession. Can Ireland beat the odds?

  • iShares MSCI Ireland (NYSEArca: EIRL) is below its long-term trend line, so for now, the economy could continue to experience some pain

click to enlarge

Ireland ETF

Tisha Guerrero contributed to this article.

Disclosure: None

Source: Ireland ETF Hit by Negative GDP