Europe midday: Bond markets repricing risk, some say
All eyes on global bond markets; IMF cuts China 2013 GDP forecast; Weaker than expected German unemployment figures; Mersch (ECB) against further non-standard measures for periphery-Die Welt
- All eyes on global bond markets
- IMF cuts China 2013 GDP forecast
- Weaker than expected German unemployment figures
- Mersch (ECB) against further non-standard measures for periphery-Die Welt
FTSE 100: -1.45%
FTSE Mibtel 30: -0.55%
Ibex 35: -0.67%
Stoxx 600: -1.42%
European equities had hit new intra-day lows by midday, with traders linking the move to yesterday's large rise in US Treasury yields and subsequent fears that the US Federal Reserve may now be more willing to consent to 'tapering' its asset purchase programme, as outlined on the front page of today's Financial Times, for example. Nevertheless, both the FT and leading market commentators are underlining the fact that said rise in market interest rates is in reality reflecting an improved outlook for the US economy, and not the opposite.
That volatility in global bond markets came on the heels of an IMF downgrade of the outlook for growth in China's gross domestic product this year and weaker than expected German unemployment data earlier in the session.
Furthermore, German daily Die Welt cited European Central Bank (ECB) Governing council member Yves Mersch as opposing the use of further non-standard measures to help the Eurozone periphery.
On a more positive note, the Financial Times also wrote today about how the European Commission is expected to waive France, Spain and the Netherland's annual deficit limits of 3% of gross domestic product.
Peugeot may go cap in hand to shareholders
German lender Commerzbank successfully concluded a €2.5bn capital increase.
Stock in Swedish fashion retailer H&M is off after Goldman Sachs cut its recommendation on the shares to 'sell' from 'neutral.'
From a sector standpoint the worst performance was to be seen in the following sectors within the DJ Stoxx 600: Personal and household goods (-2.20%), Utilities (-2.01%) and Real estate (-1.92%).
Weaker than expected data in Germany
Eurozone money supply, as measured by the so-called M3 aggregate, accelerated to a 3.2% annual rate of growth in April, after 2.6% in the month before and versus consensus expectations for a gain of 2.9%.
Euro goes the other way...
Front month Brent crude futures were falling by 0.472 dollars to the 103.73 dollar mark on the ICE.