AFP - The euro and European stocks rallied strongly on Wednesday and pressure on Spain eased, but the eurozone debt crisis weighed heavily with a credit watch for Portugal and Germany struggling to sell bonds.
The euro and European stocks rallied strongly on Wednesday and pressure on Spain eased, but the eurozone debt crisis weighed heavily with a credit watch for Portugal and Germany struggling to sell bonds.Leading EU figures warned that financial markets were underestimating the will of EU leaders and institutions to defend the euro and the eurozone.But in a new sign of the extent of anxiety among investors, a German bond issue was undersubscribed.
Marc Chandler submits:Ideas that at its meeting tomorrow the ECB may take additional measures to stem the financial crisis that has threatened this week to spread outside the periphery and toward countries like Belgium, are prompting some position adjustment in both the foreign exchange and fixed income markets.
Marc Chandler submits:Spanish bonds have fallen each day this week. The 13 bp increase today brings the 10-year yield increase to 30 bp this week, easily the worst performing bond market within the euro zone. Portugal has the dubious honor of being in second place with a 19 bp yield increase. Pressure is also evident in the short end of the coupon curve. The 2-year yield is up 19 bp on the day and 32 bp on the week; again easily the word performer over the past five sessions.
The euro rallied slightly from a recent plunge on Wednesday and pressure on Spain eased up, but the eurozone debt crisis still dominated sentiment with Portugal being put on credit watch.European stock markets rallied, and government bond rates eased a day after Spanish and Italian government 10-year borrowing costs rose to a record wide gap above the rate eurozone benchmark Germany must pay.
European stocks mostly rallied and the euro shot higher against the dollar on Tuesday as bright German economic data and a successful Spanish bond auction provided respite from the eurozone debt crisis.In company news, AT&T scrapped its $39-billion deal to buy T-Mobile USA from Deutsche Telekom, whose shares fell about 1.0 percent on the DAX 30 -- up 1.05 percent overall at 5,730.77 points in midday Frankfurt trade.
The Mole submits: Wednesday had a similar feel to Tuesday. There was a fair amount of negative news/price action early and then a rally in the afternoon. The WSJ ran an article suggesting the Fed would take a measured approach to QE while in Europe Sovereign Spreads were blowing out (Greece +9%, Spain +3%). The Dollar rallied (DXY +.5%) and commodities (CRB -1%) came under pressure.
Portugal is poised to quickly follow Greece into the default abyss following a debt downgrade to junk status by the S&P on Friday.
The Wall Street Journal reports Portugal's Bond Yields Rise Sharply After Rating Cut To Junk
Portuguese borrowing costs rose sharply Monday as some investors were forced to sell their government bond holdings after Standard and Poor's Corp. downgraded the country to junk status late Friday.