- Moody´s: Increased risk that Eurozone crisis flares up again
- Credit Suisse says "we have seen this movie before"
- Italian Treasury hits maximum issuance target at debt sale
- Italian and Spanish long-term yields hold lower
- DIW expects German GDP to grow 0.3 per cent in quarter one
FTSE Mibtel 30: 0.37%
Ibex 35: 0.65%
Stoxx 600: 0.09%
The main European equity market averages are holding slightly higher following the increased demand seen at today´s auction of long-term Italian debt.
The Italian Treasury managed to sell €6.5bn in medium and long-term debt this morning, its maximum issuance target for the day.
More specifically, Rome managed to sell €4bn of 10 year debt (and another €2.5bn of five year debt) with a bid-to-cover ratio of 1.65 versus 1.32 the last time around. "That is good," comment analysts at Digital Look. However, the yields on offer came in at 4.83% for the ten year issue, versus 4.17% the last time around.
Even so, ten year bond yields are dropping by 5bp to 4.84 per cent now.
According to Dr. Luca Cazzulani, Deputy Head of fixed income strategy at Unicredit: "The test shows that demand for BTPs (long-term Italian debt) remains healthy, with investors attracted by the current yield levels."
Acting as a backdrop, credit rating agency Moody´s last night said that the situation in Italy "raises the risk of a renewed flare-up in the region's debt crisis."
Analysts at Credit Suisse, however, were rather more relaxed, telling clients this morning that "we have seen this movie before (...) Italy may not be as bad as it seems."
They attach only a 10 per cent probability to the possibility of imminent new elections in the central Mediterranean country.
Nevertheless, the Swiss broker points out that, "the probability of Spain asking for, and receiving OMT - as the European Central Bank´s emergency funding scheme for states is known - support in coming months have risen."
Also to be taken into account, the Governor of Belgium´s central bank, Benoit Coeure, has reportedly taken a stand against any broad 'bail-in' for creditors in Cyprus, although he seems to be less opposed to asking some of the larger institutions to participate.
Spain´s Prime Minister, Mariano Rajoy, has announced that the country´s public deficit, measured as a percentage of gross domestic product, will fall to 6.7% this year, less than had been expected.
Mixed company news flow
French construction-to-telecoms conglomerate Bouygues has announced a 41% drop in 2012 net profits, to €633m.
European aeronautics giant EADS sees higher profit in 2013.
Swiss cement maker Holcim expects demand in the Americas and Asia to offset poor markets in Europe.
Swiss Life's 2012 net profit tumbled 85% to 93m Swiss francs on the back of a fourth quarter write-down at its German advisory arm.
From a sector stand-point the worst performance on the DJ Stoxx 600 is now to be seen in the following industrial groups: Telecommunications (1.11%), Banks (0.76%) and Technology (0.69%).
German consumer confidence ticks higher
GfK´s German consumer confidence index for the month of March has come in at 5.9, as expected, versus 5.8 for the month before.
The Eurozone´s economic confidence index for the month of February improved to 91.1 points versus 89.5 in the month before (Consensus: 89.9).
The Eurozone´s money supply rose at a 3.5% year-on-year pace in January, ahead of the 3.2% seen by analysts.
The ISAE institute´s gauge of Italian business confidence rose to 88.5 points in February from a reading of 88.3 in the month before (Consensus: 88.4).
German import prices fell 0.8% month-on-month in January, after a rise of 0.3% in the previous month (Consensus: -0.4%).
Other asset classes timidly higher
The euro/dollar is now edging slightly higher, by 0.34%, to the 1.3120 dollar
Front month Brent crude futures are now gaining by 0.345 dollars to the 113.1 dollar per barrel mark on the ICE.