Financial Markets…Global corporate bond sales surged to $3.3 trillion thus far this year, nearing a full year record high of $3.4 trillion reached in 2009. Unprecedented global liquidity pushed yields on the safe-haven government securities close to or below zero, prompting investors to put money into corporate debts that provide better returns.
Financial Markets…U.S. and German government bonds declined, pushing the US benchmark 10- year yield as much as 6 basis points to 1.85%, the highest since Sep.17, while comparable German yield climbed as high as 11 bps to a five-week high of 1.66% earlier, as improving market sentiment damped demand for the world’s safest assets.
Financial Markets… Moody’s Investors service lowered its credit ratings for five regions in Spain, downgrading the rating for economically important but highly indebted Catalonia by two notches to ‘Ba3’ from ‘Ba1’. The rating agency said the downgrades were driven by the deterioration in their liquidity positions.
So far this year, developing-country bond issuance has reached an all-time high as corporate borrowers in the financial and oil and gas sectors in Latin America and Emerging Europe attracted a lot of investors.
Financial Markets…The Euribor-OIS spread, a measure of bank’s reluctance to lend to one another in Europe, fell for the sixth day to 10.4 basis points, the lowest level since August 2007. The gauge indicates the degree of stress in short-term unsecured interbank lending.
Financial Markets…Europe’s benchmark Stoxx 600 stock index fell 0.5% in afternoon trading snapping four days of gains amid renewed concerns over whether and when the Spanish government would request a bailout. The euro also weakened, depreciating 0.1% to $1.306 and 103.52 yen, respectively.
U.S. Treasuries gained for the first time in five days, pushing the benchmark 10-year yield 2 basis points to 1.81%. The yield climbed to 1.83% yesterday, the highest level in a month, and has increased 15 bps this week.
Financial Markets…Credit-default swaps on German government debt tightened to 35 basis points, the lowest level since October 2010 and down sharply from a record high of 125 bps a year earlier. The country currently has the third largest debt insured by CDS contracts ($18 billion) after France and Italy ($20.7 billion each).
Financial Markets… Spanish government bonds advanced on Wednesday, with the benchmark 10-yield sliding 29 basis points to 5.52%, as Moody’s kept the country’s credit rating at investment grade. Credit-default swaps on the nation’s debt also fell 39 bps to 279 bps, gearing for the lowest level in more than 14 months.
Financial Markets…The Euriobor-OIS spread, a measure of banks’ reluctance to lend to one another in Europe, fell to 11.9 basis points, close to the lowest level since August 2007 reached on October 1 (11.8 bps).
Spain successfully sold €4.86 billion ($6.32 billion) of 12-and 18-month Treasury bills on Tuesday, exceeding its upper target range of €4.5 billion with borrowing costs sliding from last month’s similar auction. The securities were priced at an average yield of 2.83% and 3.02%, compared to 2.84% and 3.07% at the previous sale in September.
Financial Markets…U.S. Treasuries declined for the first time in five days on Monday, pushing benchmark 10-year yields to 1.66%, as stronger-than-forecasted U.S. retail sales in September added to signs of a stronger economic picture. The Treasury plans to buy back $5.25 billion in notes today in an effort to reduce long-term borrowing costs.
Real credit growth has been decelerating in China, Brazil and India all of which are operating close to capacity. However, in Turkey, credit growth has rebounded strongly in recent months.
Financial Markets…US treasuries gained and the benchmark 10-year bond yield edged down 1 basis point to 1.66%, after rising as high as 1.7% earlier, while the 30-year bond yield slid by 2 bps to 2.83% in early Friday session after a government report on wholesale price in September showed domestic inflation remained muted.
Financial Markets…Standard & Poor’s cut Spain’s sovereign credit rating by two notches from ‘BBB+’ to ‘BBB-’, just one level above non-investment grade. The rating agency said doubts over euro-zone nations’ commitment to mutualizing the cost of Spain’s bank recapitalization was one of the factors behind the downgrade.
Financial Markets… Stock markets fell on Wednesday as worries over Europe’s debt crisis and slowing global growth spurred expectations of lower corporate earnings. The MSCI Asia Pacific Index geared for a one-month low, and the Stoxx Europe 600 Index fell for a third day. U.S. stock index futures also pointed to lower opening.
Improved market sentiment and recent quantitative easing announcements have led to a strong rebound in gross capital flows to developing countries, with bond issuance accounting for much of the increase.
Financial Markets…U.S. Treasuries advanced the most in three weeks as renewed worries over Greece and Spain and a gloomy global outlook by the IMF boosted demand for safe-haven bonds. Benchmark 10-year bond yields 4 basis points to 1.71%, while 30-year yields also slid 4 bps to 2.93%.
Financial Markets… Better-than-expected U.S. monthly job data boosted global stock markets with European and U.S. equities advancing. In Asia, most region’s benchmarks gained, but Indian stocks tumbled the most as technical error led to a plunge and trading stop on its Nifty Index that briefly wiped out $58 billion in value.
Financial Markets…Spanish government bonds declined for a second day amid lingering uncertainty over when the county will seek a bailout, although it successfully sold €3.99 billion of 2-, 3-, and 5-year bonds today. Spanish 2-year bond yield rose 6 basis points to 3.28%, while the 10-year yield climbed 2 bps to 5.83%.
In September 2012, energy and non-energy rose by .8% and 1.5% respectively. Food prices eased by 1.2%, beverages increased by 2.2%, raw materials up by 3.0%, metals strengthened by 5.8% and fertilizers were up slightly. The US dollar depreciated 3.9% against the euro and 1.6% against a broad index of currencies.
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Indices of Nominal US$ Prices, Percent Changes (August to September 2012).
Financial Markets…Credit risk for bank debt dropped for a third day on Wednesday as investors speculated that a Spanish bailout is imminent, which would boost the outlook of Europe’s banks. The Markit iTraxx Financial Index of senior debt of 25 banks and insurers fell 10 basis points to 185 bps.
Financial Markets…Spanish government bonds advanced for a fourth day on Tuesday amid speculation that the country is planning to seek an international bailout. 2-year Spanish yields slid to the lowest level in a week, with benchmark 10-year yields falling 13 basis points to 5.75%.