The euro rebounded, stocks pared
losses and Italy’s bonds rallied as the European Central Bank
bought the country’s debt before today’s auction. U.S. index
futures and oil advanced.
The yield on Italy’s 10-year bonds dropped 14 basis points
at 9:24 a.m. in London, while the euro strengthened 0.2 percent
to $1.3571 after falling as much as 0.4 percent. The benchmark
Stoxx Europe 600 Index slipped 0.1 percent after sinking as much
as 1.7 percent. Futures on the benchmark Standard & Poor’s 500
Index advanced 0.8 percent. The S&P GSCI index of 24 commodities
climbed 0.4 percent, with oil in New York up 1 percent.
Italy will seek to sell 5 billion euros ($6.8 billion) of
Treasury bills today after yields on 10-year notes surged past
the 7 percent level at which Greece, Ireland and Portugal sought
international bailouts. German Chancellor Angela Merkel’s
Christian Democratic Union may adopt a motion at a party
congress next week to allow euro members to exit the currency
area, a senior CDU lawmaker said. More than $1 trillion was
erased from the value of global equities yesterday.
“Uncertainties still linger as to the political situation
going forward and the capacity of bailout mechanisms to restore
a more robust equilibrium,” Sean Maloney, a strategist at Nomura
International in London, wrote in a note. “The wildcard in the
process remains the ECB and the scope for greater utilization
of its balance sheet and the implications of a change in stance
here could, in the short term at least, be significant.”
The Italian two-year note yield slid 25 basis points, after
jumping 82 basis points yesterday. The additional yield
investors demand to hold 10-year French, Spanish, Austrian and
Belgian bonds instead of benchmark German bunds rose earlier to
euro-era records amid concern the region’s debt crisis is
spreading.
The MSCI Asia Pacific Index declined 3.3 percent, the most
since Sept. 22. The Hang Seng China Enterprises Index of
mainland companies listed in Hong Kong tumbled 5.7 percent as
China’s export growth slowed.
To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net
