Asian Stocks Snap Three-Day Gain on Bernanke Commentary (Source: Bloomberg)
Asian stocks fell, paring the first weekly advance in six weeks, amid concern that central banks are struggling to reinforce global demand amid Europe’s worsening debt crisis. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics, slid 3.8 percent. BHP Billiton Ltd. (BHP), the world’s largest mining company, gained 1.5 percent in Sydney and Jiangxi Copper Co., China’s biggest producer of the metal, rose 1.8 percent in Hong Kong pre-market trade after China cut the benchmark interest rate for the first time since 2008 and metals prices climbed. The MSCI Asia-Pacific (MXAP) slid 0.7 percent to 112.33 as of 10:23 a.m. in Tokyo, snapping three days of gains, before Hong Kong and Chinese markets open. The gauge dropped 12 percent from its peak this year on Feb. 29. through yesterday amid concern growth is slowing in China and the U.S. as the debt crisis deepens in the euro zone.
“There simply is nothing more of any great significance that the U.S. Federal Reserve could be doing,” said Lincoln Ellis, the chief investment officer at Strategic Financial Group LLC, where he helps oversee about $500 million in Chicago. He spoke in a Bloomberg TV interview. “They have had their foot fully on the gas for the past three years. The question remains -- what can policy makers do that is effective for the long term?”
Japan Stocks Fall on Spain Rating Cut, Bernanke Remarks (Source: Bloomberg)
Japanese stocks snapped a three-day rally after Spain’s credit rating was cut and Federal Reserve Chairman Ben S. Bernanke declined to specify options for further easing, outweighing China’s first interest-rate cut since 2008. Sony Corp. (6758), a consumer electronics company that relies on Europe for a fifth of its sales, lost 3 percent. Mazda Motor Corp. (7261), an automaker that gets 28 percent of its sales in North America, dropped 2 percent. Hitachi Construction Machinery Co. (6305), which gets 17 percent of its revenue from China, gained 1.5 percent after a report it’s poised to reach its earnings target. The Topix Index fell 0.8 percent to 724.70 as of 9:26 a.m. in Tokyo, poised for a 2.2 percent rise this week, its biggest since the period ended Feb. 24. The Nikkei 225 Stock Average (NKY) lost 1.1 percent to 8,543.26.
Most U.S. Stocks Fall as Financial Slump Offsets China (Source: Bloomberg)
Most U.S. stocks declined as a late- day slump in financial and technology shares erased an advance driven by China’s first interest-rate cut since 2008. The Standard & Poor’s 500 Index began paring a rally in the morning as Federal Reserve Chairman Ben S. Bernanke said the central bank will assess the economy before deciding if more stimulus is needed. The measure erased gains in the final hour of trading after a report that Greece’s upcoming election could be derailed. Bank of America Corp. (BAC) and Hewlett-Packard Co. (HPQ) dropped at least 1.3 percent. Newmont Mining Corp. (NEM) slumped 2 percent as gold tumbled amid reduced bets on Fed action.
About seven stocks retreated for every five rising on U.S. exchanges at 4 p.m. New York time. More than 7.2 billion shares changed hands, or 6.3 percent above the three-month average. The S&P 500 declined less than 0.1 percent to 1,314.99, after rallying as much as 1.1 percent earlier today. The Dow Jones Industrial Average advanced 46.17 points, or 0.4 percent, at 12,460.96, after gaining as much as 140.47 points.
German Stocks Extend Gains After China’s Rate Cut (Source: Bloomberg)
German stocks rose, completing their biggest two-day rally since April, after China cut interest rates, bolstering optimism that policy makers will increase their efforts to stimulate the global economy. Commerzbank AG (CBK) led gains on the benchmark DAX Index (DAX) after China’s decision and amid reports the European Union may support Spanish lenders. Deutsche Boerse AG (DB1) rose after RBC Capital Markets advised buying shares in the operator of the Frankfurt stock exchange. The DAX climbed 0.8 percent to 6,144.22 at the 5:30 p.m. close in Frankfurt. The gauge gained 2.1 percent yesterday after European Central Bank President Mario Draghi indicated the bank will act if the debt crisis worsens. The DAX has still tumbled 14 percent from its 2012 high on March 16 amid growing concern that Greece will have to leave the euro area. The broader HDAX Index rose 1 percent today.
“We need policy action right now,” said Guillaume Duchesne, an equity strategist at BGL BNP Paribas SA in Luxembourg. “Any reaction from central banks will be positive and a support in the short term, although markets will remain hostage to the European situation until we get more clarity and a solution on that front.” China cut benchmark lending and deposit rates for the first time since 2008. The one-year deposit rate will drop to 3.25 percent from 3.5 percent effective tomorrow. The one-year lending rate will fall to 6.31 percent from 6.56 percent.
U.K. Stocks Advance After China Cuts Interest Rates (Source: Bloomberg)
U.K. stocks advanced as China cut interest rates for the first time since 2008 in an effort to boost lending and growth in the world’s second-largest economy. Johnson Matthey Plc (JMAT) gained 4.9 percent after posting a 74 percent increase in full-year profit and declaring a special dividend. Tullow Oil Plc added 2.1 percent after it found oil off the shores of Ivory Coast. Burberry Group Plc (BRBY) climbed 5.1 percent after Credit Suisse Group AG upgraded its recommendation on the stock. The FTSE 100 advanced 1.2 percent to 5,447.79 at the close in London. The gauge has still lost 8.7 percent from its 2012 high on March 16 as concern mounted that Greece will be forced to leave the euro area. The broader FTSE All-Share Index climbed 1.2 percent today. Ireland’s ISEQ Index added 0.4 percent. The People’s Bank of China said the benchmark one-year lending rate will drop by 0.25 percentage points effective tomorrow. The one-year deposit rate will also drop by 0.25 percentage points, it said.
U.K. stocks rose the most in six months yesterday as the European Central Bank left its benchmark interest rate unchanged and extended its unlimited short-term cash offering until the start of 2013.
Emerging Stocks Reach One-Week High as China Cuts Rates (Source: Bloomberg)
Emerging-market stocks rose to a one- week high after China’s first interest rate cut since 2008 fueled speculation more central banks will take steps to boost economic growth. The MSCI Emerging Markets Index climbed 1.2 percent to 913.18 at the close in New York. The gauge has advanced 3.5 percent in the past three days, the biggest gain since February. Information technology companies rose the most since Feb. 15 as Samsung Electronics Co. (005930) jumped 5.2 percent in Seoul and Cielo SA, Brazil’s biggest card-payment processor by market value, added 2.3 percent to lift the Bovespa. (IBOV) Russia’s Micex index rose to a three-week high in Moscow. China’s one-year deposit rate will drop to 3.25 percent from 3.5 percent effective tomorrow, the People’s Bank of China said on its website today. The benchmark one-year lending rate will drop to 6.31 percent from 6.56 percent. European Central Bank President Mario Draghi said officials stand ready to act as the euro region’s growth outlook worsens.
Spain sold 2.07 billion euros ($2.6 billion) of bonds, having set a maximum target of 2 billion euros, as its 10-year borrowing costs rose. “The authorities are showing the determination to stimulate the economy and that certainly is a powerful message,” Esther Law, London-based director of emerging-markets strategy at Societe Generale SA, said by phone. “It’s a surprise in a good way and will force other central banks to think about whether this will be a good time to ease.”
Most Stocks Fall as Early Rally Fades; Treasuries Advance (Source: Bloomberg)
Most U.S. stocks fell as a late-day slump in banks and technology shares wiped out an early rally triggered by China’s first interest-rate cut since 2008. Oil slid, while Treasuries rose and the dollar was little changed. About three stocks dropped for every two that gained on U.S. exchanges and the Standard & Poor’s 500 Index erased a rally of as much as 1.1 percent to close down less than 0.1 percent at 4 p.m. in New York. Bank of America Corp. and Oracle Corp. paced losses in lenders and computer companies. Oil, which surged as much as 2.4 percent this morning, slipped 0.2 percent to $84.82 a barrel in the regular session and extended declines to as much as 1.9 percent in after-hours trading. The 10-year U.S. note yield lost two basis points to 1.64 percent.
Equities began paring gains at 10 a.m. New York time, while Treasuries turned higher and commodities slid, as Federal Reserve Chairman Ben S. Bernanke said the central bank will need to assess conditions before deciding if more measures are needed to stoke an economy threatened by Europe’s debt crisis and U.S. budget cuts. The S&P 500 lost its entire gain by the final 15 minutes of trading as the Associated Press reported that a municipal strike threatens to derail a June 17 Greek election that could determine the nation’s future in the euro. “It’s disappointing that the markets were not able to sustain the momentum established by the Chinese action,” said Peter Jankovskis, who helps manage about $2.8 billion at Oakbrook Investments in Lisle, Illinois. “Bernanke’s comments weren’t indicative of a Fed that will take aggressive action in the near future. They didn’t match to expectations. There’s also concern about the upcoming Greek election. We’ll have to wait and see how all that plays out.”
Euro Weakens Versus Major Peers Before German Export Data (Source: Bloomberg)
The euro weakened against most of its 16 major counterparts before data forecast to show German exports fell in April, adding to evidence that the European debt crisis is hurting the region’s economy. The Dollar Index rebounded from a near one-week low as Asian stocks dropped, boosting demand for safer assets even after China cut interest rates for the first time since 2008 to stimulate growth. The Japanese currency traded near the lowest level in two weeks versus the dollar on speculation the Bank of Japan (8301) will debate overhauling its asset-buying program next week. “The ground in Europe is still shaking and there are still problems there,” said Alex Sinton, director for institutional foreign exchange at Australia & New Zealand Banking Group Ltd. (ANZ) “Euro has had a corrective rally. It should come under further pressure.”
The euro dropped 0.2 percent to $1.2539 as of 9:47 a.m. in Tokyo from the close yesterday in New York. The shared currency slid 0.1 percent to 99.90 yen, following a 0.4 percent advance yesterday. The yen was at 79.65 per dollar from 79.63. The Japanese currency has lost 2.1 percent since June 1 and yesterday slid to as low as 79.80, the weakest since May 25.
FOREX-Euro, growth currencies firm on stimulus hopes
LONDON, June 7 (Reuters) - The euro hovered near one-week highs and growth-linked currencies were supported by expectations that global policymakers will act soon to support a flagging economic recovery.
"There is also profit taking in long dollar positions. We expect Bernanke to strike a dovish tone and that will keep alive expectations of more quantitative easing."
Treasuries Gain as Central Bankers Strive to Cut Rates (Source: Bloomberg)
Treasuries rose after China cut interest rates, bolstering expectations central bankers around the world will work to keep borrowing costs down to support the global economy. Benchmark 10-year yields were 18 basis points from the record low after Federal Reserve Chairman Ben S. Bernanke said yesterday the U.S. central bank has options for further easing. Australia cut interest rates on June 5, and European Central Bank President Mario Draghi left the door open at a June 6 press conference to a reduction. “It looks like coordinated action,” said Hiromasa Nakamura, who helps oversee the equivalent of $41.9 billion as an investor for Mizuho Asset Management Co. in Tokyo. “It’s positive for Treasuries.” The 10-year yield declined two basis points, or 0.02 percentage point, to 1.62 percent as of 10:07 a.m. in Tokyo, Bloomberg Bond Trader data show. It reached an all-time low of 1.44 percent on June 1. The 1.75 percent note due in May 2022 advanced 5/32, or $1.56 per $1,000 face amount, to 101 5/32.
Steepest Global Slide Since Recession Pushes Rate Cuts (Source: Bloomberg)
Monetary-policy makers from around the world are being pressed into action to shore up a global economy that is suffering its steepest slowdown since the recession ended in 2009. On the heels of a June 5 interest-rate cut by Australia, China yesterday unveiled its first reduction in borrowing costs in more than three years to counter what Premier Wen Jiabao has called increasing downward economic pressure. European Central Bank President Mario Draghi left the door open at a June 6 press conference to a rate cut, while highlighting the limitations of the ECB’s tools in countering the region’s financial turmoil. And Federal Reserve Chairman Ben S. Bernanke told a Congressional committee yesterday that policy makers will discuss later this month whether to do more to spur growth, though he said the steps they could take may have “diminishing returns.”
“Across the board, we’re seeing the central banks being galvanized into action by weak growth around the world,” said Nariman Behravesh, chief economist in Lexington, Massachusetts, at IHS Inc.
Bernanke Sees Easing Options While Not Specifying Them (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke told lawmakers the central bank has options for further easing while declining to specify them, and he described risks ranging from Europe’s crisis to fiscal tightening in the U.S. “If we decide that further action is required, then of course we have to decide what action is appropriate or what communications are appropriate,” Bernanke said to the Joint Economic Committee today. “We do have options that we can consider.” Bernanke on June 19-20 will lead the Federal Open Market Committee in a policy-setting meeting confronting the slowest employment growth in a year and a widening crisis in Europe. His comments were more measured than those of Vice Chairman Janet Yellen, who yesterday outlined possible easing steps, such as buying more bonds or extending Operation Twist, the program to lengthen maturities of the securities the Fed already owns.
“Bernanke said they could do more, but it didn’t seem like further quantitative easing or even an extension of twist was a done deal,” said Drew Matus, a U.S. economist at UBS Securities in Stamford, Connecticut.
Consumer Credit in U.S. Rose in April for an Eighth Month (Source: Bloomberg)
Consumer credit in the U.S. rose in April for the eighth consecutive month, boosted by financing for education and automobiles. The $6.51 billion increase followed a $12.4 billion gain in the previous month, the Federal Reserve said today in Washington. Non-revolving credit, which includes student loans and automobile lending, climbed by the most in three months. Consumer credit is likely to continue growing as households rely on borrowing to buy large-ticket items like cars and to maintain their spending, which accounts for about 70 percent of the economy. Demand for student loans may have also picked up ahead of the looming rise in interest rates on such financing. “People are taking advantage of cheap borrowing costs,” Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, said before the report. “It shows some confidence in the economy, but more than that, it’s just about higher demand.”
Household Net Worth in U.S. Increases by Most Since 2004 (Source: Bloomberg)
Household wealth in the U.S. climbed in the first quarter by the most in seven years, bolstered by a jump in stock prices and more stable home values. Net worth for households and non-profit groups increased by $2.83 trillion from January through March, the biggest gain since the last three months of 2004, to $62.9 trillion, the Federal Reserve said today in its flow of funds report from Washington. The jump in wealth reflected the first-quarter’s 12 percent surge in stock prices, the biggest in three years. The gain in equities has been cut by almost half this quarter, which combined with a cooling job market and smaller wage gains indicates it will take time for households to repair tattered finances.
“In the current environment, equity-market gains won’t be a stable source of wealth generation for households,” Paul Edelstein, director of financial economics at IHS Global Insight in Lexington, Massachusetts, said in a note to clients. “With interest rates at rock-bottom levels, home prices unlikely to advance strongly, and incomes growing anemically, there are few options right now for households to build their assets.”
Consumer Comfort in U.S. Increases for Third Week: Economy (Source: Bloomberg)
Consumer confidence rose last week for the third straight time as the drop in fuel costs helped shore up Americans’ finances and improved the buying climate. The Bloomberg Consumer Comfort Index increased to minus 37.6 in the week ended June 3 from minus 39.3 in the prior period. Another report today showed claims for jobless benefits fell last week. A 9 percent drop in gasoline prices from the one-year high reached in early April may be overcoming disappointing news on the jobs front and a slump in stocks caused by concern over the outlook in Europe. Federal Reserve Chairman Ben S. Bernanke highlighted those risks in testimony before Congress today while, refraining from discussing steps the central bank may take to spur growth as policy makers prepare to meet next week.
“Consumers are clearly a bit more optimistic following the sustained decline in gasoline prices over the past two months,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “For now, that is offsetting the economic slowdown and soft employment market, as well as the increasing probability of financial problems in Europe spilling over into the broader global economy.”
Bernanke Sees Risks to Economy From Europe to U.S. Budget (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said the economy is at risk from Europe’s debt crisis and the prospect of fiscal tightening in the U.S., while refraining from discussing steps the central bank might take to protect the expansion. “The situation in Europe poses significant risks to the U.S. financial system and economy and must be monitored closely,” Bernanke said today in testimony to the Joint Economic Committee in Washington. “As always, the Federal Reserve remains prepared to take action as needed to protect the U.S. financial system and economy in the event that financial stresses escalate.” Bernanke also warned lawmakers that “a severe tightening of fiscal policy at the beginning of next year that is built into current law -- the so-called fiscal cliff -- would, if allowed to occur, pose a significant threat to the recovery.”
Bernanke on June 19-20 will lead the Federal Open Market Committee in a policy-setting meeting confronting the slowest employment growth in a year and a worsening debt crisis in Europe. The U.S. added 69,000 jobs last month, the fewest in a year, even as the Fed maintained record stimulus.
Initial Jobless Claims in U.S. Fell Last Week to 377,000 (Source: Bloomberg)
Fewer Americans applied for unemployment insurance payments last week, indicating limited progress in the labor market after a two-month slowdown in hiring. First-time claims for jobless benefits fell by 12,000 to 377,000 in the week ended June 2 from a revised 389,000 the prior week that was higher than initially estimated, the Labor Department said today. The median estimate of 49 economists surveyed by Bloomberg News called for 378,000 claims. The number of people receiving extended payments plunged. The claims figures may ease concern of further labor market weakness after a report last week showed employers in May added the fewest workers in a year. While sustained demand is encouraging companies to maintain headcounts, stronger sales may be required to prompt a pickup in hiring.
Facebook Trading Losses May Near $200 Million, Knight CEO Says (Source: Bloomberg)
Industry trading losses from Nasdaq OMX Group Inc. (NDAQ)’s mishandling of Facebook Inc. (FB)’s initial public offering may be close to $200 million, Knight Capital Group Inc. (KCG) Chief Executive Officer Thomas Joyce said. Knight said last month its losses ranged between $30 million and $35 million. Nasdaq’s $40 million plan to compensate brokers for losses is “underwhelming at best,” Joyce said today at the Sandler O’Neill & Partners LP Global Exchange and Brokerage Conference in New York. “Nasdaq made decisions that created this problem that the industry suffered through, and it’s up to Nasdaq to create a solution,” he said. “Nasdaq has got to go back to the drawing board and come back with something sensible.”
Nasdaq OMX’s computer systems used to establish the opening price for Facebook were overwhelmed on May 18 by order cancellations and updates for the IPO. After the exchange repaired the problem, order updates for 30 million shares didn’t participate in the auction because of an error, Nasdaq said in a notice the next day.
China Reduces Interest Rates for First Time Since 2008 (Source: Bloomberg)
China cut borrowing costs for the first time since 2008 and loosened controls on banks’ lending and deposit rates, stepping up efforts to combat a deepening slowdown as Europe’s debt crisis threatens global growth. The one-year lending rate declines by a quarter percentage point today to 6.31 percent, the People’s Bank of China said in a statement yesterday. The one-year deposit rate drops the same amount, to 3.25 percent. The extra leeway banks will get to determine rates at variance from the official setting was called a “milestone” by UBS AG. The move, before China reports inflation, investment and output figures tomorrow, may signal that the economy is weaker than the government anticipated. Policy makers across the globe are also girding for a deeper impact from Europe’s woes, with Australia and Brazil also lowering rates in the past eight days. In South Korea, a pause in raising the benchmark has lasted a year, with the central bank staying on hold today.
“This will be the beginning of a rate cut cycle and there will be at least one more reduction this year,” said Shen Jianguang, a Hong Kong-based economist with Mizuho Securities Asia Ltd. who has worked for the European Central Bank. “The data to be released over the weekend must be very weak and inflation must have eased sharply.”
BOJ May Be Pushed to Twist Bond Purchases as Growth Slows (Source: Bloomberg)
The Bank of Japan (8301) may debate overhauling its asset-buying program next week after its campaign to end deflation was undercut by government bondholders’ reluctance to sell as financial turmoil deepens. Governor Masaaki Shirakawa and his board gather June 14-15, days before a Greek election that may determine whether the nation leaves the euro, triggering deeper European trauma. The euro crisis has already sparked a surge in demand for bonds that left the BOJ unable to meet targets for purchases twice in May. The disruptions to the central bank’s program coincide with increasing pressure by Japanese lawmakers for Shirakawa to step up efforts to support the economy, which is forecast to slow after it strengthened last quarter. BOJ board members may extend the maturity of the debt they buy or increase purchases of riskier assets, according to Bank of America Merrill Lynch.
“Given failures in bond operations, the BOJ may extend the maturity of bonds as soon as this month,” said Masayuki Kichikawa, Tokyo-based chief economist for the bank. “If not this time, they will have to do it this year at least.”
Japan Economy Grows More Than Initial Estimate (Source: Bloomberg)
Japan’s economy expanded more than the government initially estimated in the first quarter, adding to evidence that the world’s third-largest economy will sustain its recovery this year. Gross domestic product grew an annualized 4.7 percent in the three months ended March 31, the Cabinet Office said in Tokyo today, compared with a preliminary estimate for a 4.1 percent expansion. The median forecast of 18 economists surveyed by Bloomberg News was for 4.5 percent growth. The report includes an upward revision to private demand, signs that the domestic economy is recovering as rebuilding from last year’s earthquake kicks in and government incentives for buying fuel-efficient cars boost consumption. At the same time, Japan is at risk from a deepening European debt crisis that is spurring gains in the yen that could weigh on profits of exporters.
“Domestic demand will probably remain on a recovery trend as the effects of the government’s measures and public investment for rebuilding” are likely to carry into the third quarter, said Yoshiki Shinke, chief economist at the Dai-Ichi Life Research Institute in Tokyo, said before the report. “Yet, there are clouds on the horizon as the downside risks from overseas factors are rising.”
Brazil Slowdown Prompts Carmaker Renault Argentina to Cut Shifts (Source: Bloomberg)
Renault Argentina SA, the country’s third-biggest car producer, is cutting back on shifts at its Cordoba plant after a drop in sales prompted by slowing demand in neighboring Brazil. The maker of the Clio and Kangoo models will halt one of two production shifts today and both shifts tomorrow and on June 15 in part because of falling sales, according to an official at the company who isn’t authorized to speak publicly. The plant employs 1,800 people. The Argentine auto industry has been hit by a drop in demand from Brazil, the country’s biggest trading partner. Vehicle exports fell 46 percent in May from a year earlier, according to a June 5 statement by the Argentine Automakers Association. Domestic sales of vehicles slid by 15 percent over the same period, while output dropped 24 percent.
South America’s second-biggest economy will expand 2 percent this year, according to Boris Segura, a Latin America analyst at Nomura Holdings Inc. Segura cut his earlier forecast of 3 percent due to import restrictions and lower investments. That would be the weakest growth since a 0.9 percent expansion in 2009.
SNB Foreign-Currency Holdings Hit Record on Intervention (Source: Bloomberg)
The Swiss central bank’s foreign- currency reserves surged to a record in May as the euro region’s increasing turmoil forced policy makers to step up their defense of the franc floor. Currency holdings rose to 303.8 billion Swiss francs ($318 billion) from 237.6 billion francs in April, according to a statement published on the Swiss National Bank’s website today. Walter Meier, a spokesman at the SNB in Zurich, said a “large part” of the increase was due to currency purchases to defend the minimum exchange rate of 1.20 francs per euro. The central bank finds itself engulfed by the euro region’s worsening fiscal crisis after Spain’s banking woes and Greece’s inconclusive elections raised the specter of a break-up of the currency union. SNB President Thomas Jordan said last month that policy makers are “observing a considerable upward pressure on the franc” as investors shift into havens including the Swiss currency.
“It’s quite a significant increase,” said Alessandro Bee, an economist at Bank Sarasin in Zurich. “The euro crisis is decisive -- if there’s a further worsening, the SNB will be forced to remain active on markets.”
Spain Market-Access Concern Eases, Bond Sale Beats Target (Source: Bloomberg)
Two days after a senior government official said Spain’s access to debt markets was closed, the Treasury beat its 2 billion-euro target ($2.5 billion) at a bond sale, easing concern about financing the region’s third-biggest budget deficit. Spain sold its benchmark 10-year bond to yield 6.044 percent, the most since Nov. 17 when the yield in the secondary market reached a euro-era record 6.78 percent. Demand for the security was 3.29 times the amount sold, higher than at the previous auction in April. In the secondary market Spain’s 10- year bond yield fell to 6.109 percent after the sale at 10:05 a.m. in London. The auction results were “pretty decent overall and the market appears eminently comfortable with the outcome,” said John Davies, a fixed-income strategist at WestLB AG in London. “A tad above the top end of the target volume range obviously looks good, but I think the more encouraging factor was that the 2022 bond came at 6.04 percent, so safely below levels prevailing in the secondary market.”
Budget Minister Cristobal Montoro said on June 5 that the “door of the markets isn’t open to Spain” as he called for European institutions to help the nation shore up its lenders. As Spanish borrowing costs approach the 7 percent level that preceded bailouts in Greece, Ireland and Portugal, the Treasury increasingly depends on domestic banks.
