12-07-2011, 03:22 PM
Euro crisis deepens overnight... breaks BIG technical levels...
Italian bond yields soaringTuesday, July 12, 2011
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From Bloomberg:
The euro weakened and the cost of insuring debt from Italy, Spain and Portugal climbed to records as the chance of a Greek default increased. European stocks tumbled the most since March while Treasurys rose.
The euro dropped to as little as $1.3837, the lowest since March 11, and was at $1.3926 at 6 a.m. in New York. Italy's 10-year bond yield rose to 6 percent for the first time since 1997. The 10-year Treasury yield fell six basis points to 2.86 percent. The Markit iTraxx SovX Western Europe Index of government credit-default swaps jumped 7 percent, while the chance of Greece defaulting in the next five years climbed to 88 percent. The Stoxx Europe 600 Index dropped 1.7 percent and futures on the Standard & Poor's 500 Index declined 1 percent.
Almost $1 trillion was wiped off the value of global equities yesterday while Italy's 10-year yield jumped more than 60 basis points in two days and the Treasury yield dropped 17 basis points. The link between sovereign risk and bank risk is potentially "explosive," and in Italy it poses an "element of fragility," European Central Bank Executive Board member Lorenzo Bini Smaghi said yesterday in Milan.
"Contagion is running amok," Bill Blain, a strategist at Newedge Group in London, wrote in a research note. "A sovereign default is now being discussed openly. We seem to have crossed that moment when chaos theory takes over and we get a price breakout into unknown territory."
The euro weakened as much as 1.5 percent against the Swiss franc, falling to a record low of 1.15533. The Dollar Index, which tracks the U.S. currency against those of six trading partners, advanced 0.5 percent, climbing for the third day. The New Zealand dollar declined against all 16 of its most-traded peers monitored by Bloomberg, sliding 1.3 percent against the U.S. currency to the lowest level since June 29.
Default Risk
The Markit iTraxx SovX WE gauge of credit-default swaps rose 20 basis points to a record 311. Contracts protecting Italian debt climbed 42 basis points to 343, Portugal increased 51 basis points to 1,187 and Spain rose 34 basis points to 380, all records, according to CMA. Swaps tied to Greece surged 150 basis points to an all-time high of 2,453.
The yield on the 10-year Spanish bond jumped 15 basis points, climbing for the seventh consecutive day, the longest run of increases since Dec. 14. The extra yield investors demand to hold the debt instead of benchmark German bunds climbed as high as 3.76 percentage points, a euro-era record. The Irish 10-year yield rose 34 basis points, also to the highest since before the euro was introduced in 1999, while the Greek 10-year yield jumped seven basis points to more than 17 percent for the third straight day.
The yield on the bund dropped seven basis points, falling for the third day, while the 10-year U.S. Treasury yield declined six basis points to 2.86 percent, with the yield sliding to the lowest this year.
Italy, Greek Sales
Italy sold 6.75 billion euros of treasury bills in its first auction since borrowing costs began soaring amid contagion from the Greek debt crisis. The Treasury in Rome said it sold the one-year bills, meeting its target, at an average yield of 3.67 percent. That compares with a yield of 2.147 percent when similar securities were last sold on June 10. Demand for the debt was 1.55 times the amount sold, compared with 1.71 times at the June auction.
Greece sold 1.625 billion euros of 182-day bills, the nation's debt agency said. Investors bid for 2.88 times the securities offered, the Public Debt Management Agency said. Belgium is scheduled to auction as much as 3 billion euros of 98- and 371-day bills.
The U.S. sells $32 billion of three-year notes today, the first of three sales totaling $66 billion.
Credit Agricole, Thomas Cook
More than 18 shares declined for every one that gained in the Stoxx 600. Barclays Plc (BARC) and Credit Agricole SA fell at least 3 percent, leading a gauge of banks to the lowest level in two years. Thomas Cook Group Plc (TCG), Europe's second-largest tour operator, plunged 27 percent after cutting its full-year profit forecast.
The drop in S&P 500 futures indicated the U.S. equities gauge will decline for a third day. Alcoa Inc. (AA) slipped 2.2 percent in European trading after the largest U.S. aluminum producer began the earnings season with profit that missed analysts' estimates.
A report today may show the U.S. trade deficit held near a four-month low in May. The gap was little changed at $44.1 billion compared with the $43.7 billion shortfall in April, according to the median of 73 economists' estimates in a Bloomberg survey.
Emerging Markets
The MSCI Emerging Markets Index retreated 1.9 percent, set for its biggest drop since May 23. The Hang Seng China Enterprises Index tumbled 3.7 percent, the most since May 2010, after Moody's Investors Service said some Chinese companies are engaging in potentially risky business practices. The Bombay Stock Exchange Sensitive Index dropped 1.8 percent as Infosys Ltd., India's second-largest software exporter, forecast sales that missed analysts' estimates.
The Markit iTraxx SOVX CEEMEA Index of credit-default swaps for emerging Europe, the Middle East and Africa jumped 14 basis points to 228, the highest level since Nov. 30, according to CMA in London.
The S&P GSCI index of 24 commodities fell 1.2 percent. Cotton dropped 4.2 percent to $1.0429 a pound, leading commodities lower. Wheat declined 2 percent to $6.2675 a bushel and nickel slipped 1.4 percent to $22,900 a metric ton.
Oil futures for August delivery fell as much as 1.7 percent to $93.55 a barrel on the New York Mercantile Exchange, dropping below the 200-day moving average for front-month prices.
Italian bond yields soaringTuesday, July 12, 2011
Text Size:
From Bloomberg:
The euro weakened and the cost of insuring debt from Italy, Spain and Portugal climbed to records as the chance of a Greek default increased. European stocks tumbled the most since March while Treasurys rose.
The euro dropped to as little as $1.3837, the lowest since March 11, and was at $1.3926 at 6 a.m. in New York. Italy's 10-year bond yield rose to 6 percent for the first time since 1997. The 10-year Treasury yield fell six basis points to 2.86 percent. The Markit iTraxx SovX Western Europe Index of government credit-default swaps jumped 7 percent, while the chance of Greece defaulting in the next five years climbed to 88 percent. The Stoxx Europe 600 Index dropped 1.7 percent and futures on the Standard & Poor's 500 Index declined 1 percent.
Almost $1 trillion was wiped off the value of global equities yesterday while Italy's 10-year yield jumped more than 60 basis points in two days and the Treasury yield dropped 17 basis points. The link between sovereign risk and bank risk is potentially "explosive," and in Italy it poses an "element of fragility," European Central Bank Executive Board member Lorenzo Bini Smaghi said yesterday in Milan.
"Contagion is running amok," Bill Blain, a strategist at Newedge Group in London, wrote in a research note. "A sovereign default is now being discussed openly. We seem to have crossed that moment when chaos theory takes over and we get a price breakout into unknown territory."
The euro weakened as much as 1.5 percent against the Swiss franc, falling to a record low of 1.15533. The Dollar Index, which tracks the U.S. currency against those of six trading partners, advanced 0.5 percent, climbing for the third day. The New Zealand dollar declined against all 16 of its most-traded peers monitored by Bloomberg, sliding 1.3 percent against the U.S. currency to the lowest level since June 29.
Default Risk
The Markit iTraxx SovX WE gauge of credit-default swaps rose 20 basis points to a record 311. Contracts protecting Italian debt climbed 42 basis points to 343, Portugal increased 51 basis points to 1,187 and Spain rose 34 basis points to 380, all records, according to CMA. Swaps tied to Greece surged 150 basis points to an all-time high of 2,453.
The yield on the 10-year Spanish bond jumped 15 basis points, climbing for the seventh consecutive day, the longest run of increases since Dec. 14. The extra yield investors demand to hold the debt instead of benchmark German bunds climbed as high as 3.76 percentage points, a euro-era record. The Irish 10-year yield rose 34 basis points, also to the highest since before the euro was introduced in 1999, while the Greek 10-year yield jumped seven basis points to more than 17 percent for the third straight day.
The yield on the bund dropped seven basis points, falling for the third day, while the 10-year U.S. Treasury yield declined six basis points to 2.86 percent, with the yield sliding to the lowest this year.
Italy, Greek Sales
Italy sold 6.75 billion euros of treasury bills in its first auction since borrowing costs began soaring amid contagion from the Greek debt crisis. The Treasury in Rome said it sold the one-year bills, meeting its target, at an average yield of 3.67 percent. That compares with a yield of 2.147 percent when similar securities were last sold on June 10. Demand for the debt was 1.55 times the amount sold, compared with 1.71 times at the June auction.
Greece sold 1.625 billion euros of 182-day bills, the nation's debt agency said. Investors bid for 2.88 times the securities offered, the Public Debt Management Agency said. Belgium is scheduled to auction as much as 3 billion euros of 98- and 371-day bills.
The U.S. sells $32 billion of three-year notes today, the first of three sales totaling $66 billion.
Credit Agricole, Thomas Cook
More than 18 shares declined for every one that gained in the Stoxx 600. Barclays Plc (BARC) and Credit Agricole SA fell at least 3 percent, leading a gauge of banks to the lowest level in two years. Thomas Cook Group Plc (TCG), Europe's second-largest tour operator, plunged 27 percent after cutting its full-year profit forecast.
The drop in S&P 500 futures indicated the U.S. equities gauge will decline for a third day. Alcoa Inc. (AA) slipped 2.2 percent in European trading after the largest U.S. aluminum producer began the earnings season with profit that missed analysts' estimates.
A report today may show the U.S. trade deficit held near a four-month low in May. The gap was little changed at $44.1 billion compared with the $43.7 billion shortfall in April, according to the median of 73 economists' estimates in a Bloomberg survey.
Emerging Markets
The MSCI Emerging Markets Index retreated 1.9 percent, set for its biggest drop since May 23. The Hang Seng China Enterprises Index tumbled 3.7 percent, the most since May 2010, after Moody's Investors Service said some Chinese companies are engaging in potentially risky business practices. The Bombay Stock Exchange Sensitive Index dropped 1.8 percent as Infosys Ltd., India's second-largest software exporter, forecast sales that missed analysts' estimates.
The Markit iTraxx SOVX CEEMEA Index of credit-default swaps for emerging Europe, the Middle East and Africa jumped 14 basis points to 228, the highest level since Nov. 30, according to CMA in London.
The S&P GSCI index of 24 commodities fell 1.2 percent. Cotton dropped 4.2 percent to $1.0429 a pound, leading commodities lower. Wheat declined 2 percent to $6.2675 a bushel and nickel slipped 1.4 percent to $22,900 a metric ton.
Oil futures for August delivery fell as much as 1.7 percent to $93.55 a barrel on the New York Mercantile Exchange, dropping below the 200-day moving average for front-month prices.
"The philosophers have only interpreted the world, in various ways. The point, however, is to change it." Karl Marx
"He would, wouldn't he?" Mandy Rice-Davies. When asked in court whether she knew that Lord Astor had denied having sex with her.
“I think it would be a good idea” Ghandi, when asked about Western Civilisation.
"He would, wouldn't he?" Mandy Rice-Davies. When asked in court whether she knew that Lord Astor had denied having sex with her.
“I think it would be a good idea” Ghandi, when asked about Western Civilisation.