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European Market Update

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European Market Update

Thu, Sep 6 2007, 10:26 GMT
by Trade The News Staff

TradeTheNews.com

- The European indices are currently trading in positive territory in the session, trading higher as market participants become more optimistic on the “sub-prime situation”.

- Ahead of today’s interest rate decisions, both gilts and European government bonds are trading lower. Spain sold€1.61B in 3.90% 2012 Bonos overnight, with an average yield of 4.197%, and a bid-to-cover of 1.79x. The expected range for the auction was €1.5B-€1.8B, and the bid-to-cover compared to the average of 2.27x over the last three auctions. The current auction brings the amount outstanding for the issue to €8.196B. France sold €3.91B in 4.25% 2017 OATs with an average yield of 4.35%, and a bid-to-cover of 2.33x. The expected sale range was €3.8B-€4.3B, and the bid-to-cover compared to the average of 2.90x over the last three auctions.

- In a 1-day refi overnight the ECB injected €42.245B into the market with an average lending rate of 4.13%. The tender totaled €90.8B with 46 banks seeking liquidity. 

- An ECB report to the EU was leaked to the press overnight. The report indicated that there will be no ECB rate hike at today’s meeting. The report said that the EMU financial system is strong and resistant, but said that the tight credit squeeze could hurt the real economy.

- Swiss unemployment for the month of August unexpectedly rose to 2.6% from 2.5% in July, while the seasonally adjusted unemployment rate remained unchanged at 2.7%. Swiss unemployment remained near five-year lows as strong demand has resulted in increased hiring.

- Swedish industrial production for the month of July declined by more than expected to 0.3% m/m from 0.8% in June, and declined to 5.2% y/y from 5.5% as expected. Manufacturing production declined to –1.7% m/m from 0.5% in June, and rose to 8.7% y/y from –5.3% in June.

- July industrial production in the UK unexpectedly declined to –0.1% m/m from a downwardly revised 0.0% in June, and rose by less than expected to 0.9% y/y from 0.8% in June. Manufacturing production unexpectedly declined to –0.3% m/m from a downwardly revised 0.1% in June, and declined to 0.8% y/y from an upwardly revised 1.0% in June.

Published on  Thu, Sep 6 2007, 10:23 GMT