European
stocks and the euro rose on Friday on expectations of the first sale of
bond debt wounded in Italy during the year will go well, but the
concern for Greek debt swap deal and the prospect of a broader euro zone
economy limited gains.The
market mood was lifted on Thursday strong auction of debt from Spain,
pushing the flow of a three-year loans to banks from the European
Central Bank, which was cautiously optimistic about the prospects for
the region after leaving the door open for further interest rate cuts."The
euro rose after (Thursday) auctions were much better than expected,"
said Manuel Oliver, a currency strategist at UBS in Zurich.
"But this is a correction to this time and no major fresh buying."The
euro rose 0.3 percent to $ 1.2824, after rising to as high as $ 1.2879
in Asian trading, and pull away from the 16-month low around $ 1.2662
hit earlier in the week.FTSEurofirst 300 <. FTEU3>
index of leading European shares rose sharply at the opening back to
the weakening of growth of 0.3 per cent 1,022.06 points, 0940 GMT. He reached the five-month high 1,031.08 on Thursday before closing 0.3 percent lower.Banks were the main winners from the STOXX Europe 600 index bank <. SX7P> up 1.6 percent.The MSCI index of global <. MIWD00000PUS> rose 0.4 percent.The
second key test for two days of market appetite for debt of the
countries in the forefront of eurozone crisis, Italy's three-year bonds
sold in 2018 with a paper in the auction due 1000 GMT.The
difference between the rates it pays compared with benchmark German
bonds - a key measure of investor confidence, has narrowed in the early
morning on Thursday, as well as the successful sale could see the spread
decline further.10-year
Italian government bonds, generates about 6.5 percent on Friday
compared to about 7.0 percent before the Spanish auction debt.Alan McQuaid, chief economist at Bloxham Stockbrokers, said he expects the auction to attract a huge demand."Do
not be surprised if the peripherals continue to do well, especially
with another three-year (ECB funding injection) coming up in February."But
the critical point of the end of the month to see that the (euro), come
up with policies to enhance the mood further. Sentiment is still
fragile. He was inspired by the actions of the ECB, but politicians must
deliver as well."The
results make or break talks debt swap to avoid the weak link eurozone,
Greece, from slipping into default remains in balance.The
private sector bondholders said time is running out to make a deal on
the voluntary exchange of debt, though Greek officials sounded more
optimistic and French bank Societe Generale said the agreement was close
on the writedown of at least half the cost of debt.Whatever
the outcome, "the agreement of the Greek debt swap is unlikely to be
enough to bring Greece to return to a sustainable path," said Oliver at
UBS.Appetite for riskAnother key criterion for investor sentiment, Euro Stoxx 50 Volatility Index <. V2TX>, fell by 4.3 per cent to touch five-month low in early trading. In 0935 GMT it decreased by 3.2 percent in 0935 GMT.Big
appetite for risk also weighed on safe haven gold, pushing it down to
0.6 per cent to $ 1642 per ounce, after he hit one-month high on
Thursday, but the oil recovered from sales in the previous session,
reporting that proposed by the European Union embargo on Iranian oil imports will be delayed."If
more people are becoming bullish, prices, particularly in stocks and
commodities will rise. This is now the only question is when you make
the switch." said Tetsu Emori, fund manager of Astramax company in Tokyo.Brent
crude oil increased by almost $ 112 per barrel, caused by fears of
supply disruptions in Nigeria, but the benefits topped report that
proposed by the European Union embargo on imports of Iranian crude would
be phased in over six months.On
Thursday, the ECB left official interest rates unchanged and did not
propose to take any further steps to resolve the debt crisis of the euro
area, stating that there were tentative signs economy stabilizing.The bank said its three-year cost loans were to help banks and maintaining the morale of the whole euro area.The
results came as little surprise to investors, given the slightly
stronger tones of some of the latest data and recent back to back rate
cuts.Italy will be hoping to match the success of the Spanish auction on Thursday, when it sells bonds to 4750000000 euros on Friday.On
the front of this, the British factory gate inflation fell more than
expected in December, official data showed Friday, raising expectations
that the Bank of England will inject more stimulus into the plight of
the economy in the near future.Sterling fell to a two-week low against the euro after the data.
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