By Stephen Kirkland
Jan. 13 (Bloomberg) -- Spanish bonds led a second day of gains for Europe?s most-indebted nations as demand rose at an auction. The Swiss franc weakened after the central bank said its strength poses a risk to growth, corn advanced and U.S. index futures were little changed.
The yield on 10-year Spanish bonds slid 13 basis points at 7:45 a.m. in New York, and the extra yield investors demand for Italian 10-year debt instead of German bunds narrowed nine basis points. The gap between two- and 30-year U.S. Treasury yields widened to a record. The franc slipped against all of its peers. The Standard & Poor?s 500 Index futures added less than 0.1 percent, and the Stoxx Europe 600 Index pared earlier declines. Corn jumped to a 30-month high, while gold dropped.
Investors bid for 2.1 times the 3 billion euros ($3.9 billion) of Spanish five-year bonds sold today, after German Chancellor Angela Merkel said she?s ready to take whatever steps are necessary to stem Europe?s debt crisis. The European Central Bank left interest rates on hold today. Moody?s Investors Service said the U.S., U.K., Germany and France need to bring future costs under control if they are to ?maintain long-term stability in their debt-burden credit metrics.?
?Debt auctions and growing speculation that a more comprehensive solution will be unveiled by European authorities to combat the escalating sovereign debt crisis have driven a relief rally,? Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London, wrote in a report today.
Italian Auction
The cost of insuring Spanish government debt against default using credit-default swaps fell 14 basis points, according to CMA. Demand rose from the previous auction of five- year bonds on Nov. 4, when investors bid for 1.6 times the amount offered.
The yield on Italy?s 10-year bond declined 10 basis points to 4.69 percent, and default swaps on its debt slipped eight basis points, according to CMA. The government sold 3 billion euros of 2015 bonds, with a bid-to-cover ratio of 1.41, and 3 billion euros of 2026 notes with a ratio of 1.42, with demand little changed from earlier sales. Portugal?s borrowing costs fell and demand rose at a sale of 10-year bonds yesterday. The cost of default protection decreased 15 basis points today.
The 30-year U.S. Treasury yield was little changed at 4.53 percent before the government sells $13 billion of the notes, the third of three auctions this week totaling $66 billion.
The franc depreciated 0.7 percent per euro and slid 0.2 percent against the dollar. Swiss central bank Vice President Thomas Jordan said the currency?s renewed ascent against the euro poses a threat to economic growth this year. The euro strengthened 0.5 percent versus the dollar, climbing for the fourth day, the longest run of gains since October. The pound was little changed per dollar after the Bank of England kept rates on hold.
Dixons, Tesco
Europe?s Stoxx 600 retreated from a 28-month high, as 15 of its 19 industry groups declined. Dixons Retail Plc sank 8.3 percent as the U.K?s largest consumer-electronics retailer said earnings will probably be ?around the bottom end? of analysts? estimates. Tesco Plc fell 3 percent after Britain?s biggest retailer posted holiday sales growth that missed estimates. Commerzbank AG slid 3.2 percent as Germany?s second-biggest bank sells as much as 632 million euros of shares to boost capital.
The decrease in U.S. equity-index futures follows the biggest two-day rally for the S&P 500 in five weeks. Reports today may show initial jobless claims were little changed last week, the U.S. trade deficit widened in November and the cost of wholesale goods rose in December.
Texas Instruments Inc., the second-biggest U.S. chipmaker, fell 0.7 percent in German trading after Jefferies Group Inc. downgraded the shares to ?hold? from ?buy.? Deere & Co. rose 1.2 percent as JPMorgan Chase & Co. upgraded the world?s largest farm-equipment maker to ?overweight? from ?neutral.?
Higher Rates
The MSCI Emerging Markets Index climbed 0.1 percent to the highest level since June 2008. South Korea?s won paced gains in Asian currencies, rising 0.5 percent against the dollar, after the central bank lifted interest rates to curb inflation. Hungary?s forint gained as much as 0.3 percent after the government sold more debt than it planned at today?s auction.
India?s Bombay Stock Exchange Sensitive Index sank 1.8 percent after Infosys Technologies Ltd., the nation?s second- largest software-services exporter, reported third-quarter profit that missed analysts? estimates.
Corn and soybeans extended gains to the highest since July 2008 after the U.S. Department of Agriculture said yesterday grain inventories fell. Corn futures jumped as much as 1.7 percent and soybeans climbed as much as 1.1 percent. Gold fell 0.6 percent to $1,379.72 an ounce, the first drop this week.
--With assistance from Claudia Carpenter, Abigail Moses, Michael Patterson, Andrew Rummer and Daniel Tilles in London. Editors: Stephen Kirkland, Justin Carrigan
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net.
To contact the editor responsible for this story: Paul Sillitoe at psillitoe@bloomberg.net.
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured site: So, Why is Wikileaks a Good Thing Again?.
No comments:
Post a Comment