The European equity rally continued yesterday following a Spanish bond auction in which results turned out better than expected with respect to the takedown with sales exceeding the €3 billion target. However, yields on both the 12 and 18-month issuances rose dramatically, nearly doubling. The risks to the banking system are also heightened as nonperforming loans rise and bank “double down” on sovereign bonds, transferring risks to taxpayers. The biggest story from Spain is the Argentine government seizure of YPF, an oil company owned by Repsol. The Italian MIB soared 3.68% on equity optimism followed by a 2.86% rise in the Euro Stoxx 50. The French CAC was also notably higher, adding 2.72%. EURUSD is mostly unchanged at 1.3126.
Asian stocks are moving to the upside this morning following the IMF report which raises world growth prospects to 3.50% for 2012. Equities are being led higher by the Nikkei which has jumped 1.67% followed by a 1.29% rise in the Australian ASX. The Hang Seng has increased 0.91% so far in today’s session. Chinese home prices fell in over half the cities tracked as the Central Planners continue to fight the housing bubble. The Reserve Bank of India surprised investors with a 50 basis point rate cut yesterday after announcing earlier a wait-and-see policy because of overly strong inflation data. USDJPY has moved dramatically, adding 0.73% to 81.430. AUDUSD and NZDUSD are both 0.13% higher at 1.0404 and 0.8222.
Economic news from the U.S. yesterday was mostly disheartening following poorer than expected housing starts and a decline in industrial production. The data was no match for the positive IMF upgrade which spurred equities higher. The equity rally was led by a 1.82% gain in the Nasdaq. The S&P 500 and Dow Jones Industrial Average added 1.55% and 1.50% respectively. There was a massive surge in oil prices yesterday, with prices spiking over $105 per barrel before retreating to $104.17. Natural Gas continues to test lows, trading at 1.952/MMBtu. Most metals are unchanged but copper is showing signs of weakness after dropping -0.57%. DXY is mostly unchanged, sitting at 79.667
Asian stocks are moving to the upside this morning following the IMF report which raises world growth prospects to 3.50% for 2012. Equities are being led higher by the Nikkei which has jumped 1.67% followed by a 1.29% rise in the Australian ASX. The Hang Seng has increased 0.91% so far in today’s session. Chinese home prices fell in over half the cities tracked as the Central Planners continue to fight the housing bubble. The Reserve Bank of India surprised investors with a 50 basis point rate cut yesterday after announcing earlier a wait-and-see policy because of overly strong inflation data. USDJPY has moved dramatically, adding 0.73% to 81.430. AUDUSD and NZDUSD are both 0.13% higher at 1.0404 and 0.8222.
Economic news from the U.S. yesterday was mostly disheartening following poorer than expected housing starts and a decline in industrial production. The data was no match for the positive IMF upgrade which spurred equities higher. The equity rally was led by a 1.82% gain in the Nasdaq. The S&P 500 and Dow Jones Industrial Average added 1.55% and 1.50% respectively. There was a massive surge in oil prices yesterday, with prices spiking over $105 per barrel before retreating to $104.17. Natural Gas continues to test lows, trading at 1.952/MMBtu. Most metals are unchanged but copper is showing signs of weakness after dropping -0.57%. DXY is mostly unchanged, sitting at 79.667
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