Chillin' out till it needs to be funded
The morning stream of data knocked the winds out of the Europe watchers but sentiment still improved on basis of yesterday’s scare turning out to be a non starter. UK, the most promising Common market, unfettered by the Euro also lost most of its non european exports to increase the deficit to non European countries to GBP 5 bln out of a large trade deficit of March of just under GBP 9 bln
However, Europe was mostly stable even as Italian yields at the 3 year bond auction were awarded at 3.89% , above last month’s 2.89% but overall the auction was much more comfortable than the one for 10Y German bunds. The March 2015 bonds were also prudently targeting just EUR 2.88 bln after the situation in Spain seems to be volatile enough for Fixed income market watchers though most markets do not expect any localised flare up to spread now to global markets. US jobless claims earlier stood up in the wake of a bad Jobs report and Q2 forecasts for the US confirmed a slower but steady recovery in the World’s largest Economy.
A reminder from ECB Wednesday afternoon in the markets with selective buying and a rejoinder from ECB members today confirming the ECB interest in keeping yields low kept Spanish and Italian yields trending down today