Spain, Italy Auctions Raise

Arthi Gupta
13 Jan, 2011
New York City

The European indexes rose after successful bond auction by Spain and Italy. The ECB left key rate unchanged at 1%. German wholesale and French consumer prices rose in December. Dutch retail sales surged in November. Greek jobless rate climbed in October.

[R]4:00 PM Frankfurt – The European indexes rose after successful bond auction by Spain and Italy. The ECB left key rate unchanged at 1%. German wholesale and French consumer prices rose in December. Dutch retail sales surged in November. Greek jobless rate climbed in October.[/R]

U.S. stocks fell after weekly jobless claims surged, producer prices rose more than estimated and trade deficit unexpectedly narrowed and Asian markets gained. European indexes opened higher but lost some of the luster after the release of U.S. data. Spain’s leading market index retained the momentum after the successful bond offering.

Spain raised €3 billion or $3.9 billion on Thursday in a debt auction. The average yield on the 5-year bonds rose to 4.54% compared with 3.58% at the last auction on Nov. 4. The auction was 2.1 times oversubscribed, compared to 1.6 times last time.

Italy raised €6.0 billion or S$10.2 billion in bonds on Thursday at unexpectedly high rates. The Treasury issued €3.0 billion in five-year bonds and €3.0 billion n 15-year bonds, the Bank of Italy said in a statement.

The yield was 3.67% for five-year bonds compared to 3.24% at the last sale, and 5.06% for the 15-year bonds compared to 4.81%. The auction was over-subscribed, with the Treasury receiving €8.5 billion in bids.

In Paris CAC 40 Index gained 26.25 or 0.67% to close at 3,971.32 and in Frankfurt DAX Index edged higher 1.50 or 0.02% to close at 7,070.28.

ECB Retains Key Rates

The European Central Bank on Thursday maintained its key interest rate at a historic low of 1% for the 20th straight month. The central bank also retained its interest rate on the marginal lending facility at 1.75% and that on the deposit facility at 0.25%.

BoE Holds Key Rate, QE

The Bank of England on Thursday left its key interest rate unchanged for the 22nd month in a row at a record low again at 0.5%.and retained the size of the quantitative easing at £200 billion.

German WPI Up

Germany's wholesale price inflation increased to 9.5% in December from 7.8 in November, data from the Federal Statistics Office showed on Thursday. This was the highest annual rate since July 2008.

On a monthly basis, prices increased 1.8% in December. This was the highest monthly increase since January 1989, the statistics office said.

French Inflation Rises

France's consumer price index rose 1.8% annually in December, compared to the 1.6% increase in November, the statistics office INSEE said.

On a monthly basis, the index increased 0.5% in December, after a 0.1% gain in November.

The seasonally adjusted measure of inflation showed an annual increase of 1.8% and a monthly gain of 0.4% in December.

Romania's Current Account Deficit Widens

Romania's current account deficit increased during the January to November period due to rise in services and income deficit and fall in current transfers surplus, the central bank said on Thursday.

The deficit on the current account widened 23.5% annually to €5.17 billion during the ten-month period.

Sweden Annual Inflation Increases

Sweden consumer price annual inflation rose to 2.3% in December from 1.8% in November, Statistics Sweden said today.

On a monthly basis, consumer prices climbed 0.7% in December.

Dutch Retail Sales Surges, Industrial Output Slows

Dutch retail sales increased 4.3% on a yearly basis in November, following a revised 1.8% fall in October. The latest growth in sales was the highest in over two years, the Central Bureau of Statistics said. The volume of sales increased 3% in November from a year earlier, compared to a revised 3.1% decrease in October.

Dutch industrial production rose 5.1% annually in November, slightly slower than a revised 5.2% growth in October, the Central Bureau of Statistics said.

Production growth was the strongest in transport industry with a 47% annual increase in output, the statistics office said.

Greece Jobless Rate Climbs

Unemployment rate in Greece increased to 13.5% in October from 12.6% in September, according to the Hellenic Statistics Authority. A year ago, the jobless rate was 9.8%.

A total of 684,047 persons were unemployed in the country during October, while the number of employed totaled 4.4 million. The number of inactive persons was 4.3 million.

Estonian Current Account Surplus Declines

Estonia's current account surplus declined to EEK 696.2 million in November from EEK 1.62 billion in October, the central bank said on Thursday.

Gainers & Losers

Commerzbank AG surged 6.46% to $7.42 after the German bank said that it will raise its equity capital by 10% by swapping hybrid equity instruments for new shares as part its capital restructuring. In connection with this arrangement, the company has reached a deal with Credit Suisse Securities (Europe) Ltd.

Gemalto NV climbed 2.02% to €34.35 after the world leader in digital security said it entered into an agreement to be MasterCard's preferred emergency card replacement vendor worldwide.

Koninklijke DSM N.V. dropped 1.18% to €44.45 after the multinational chemical company said that its indirect wholly-owned subsidiary, Greenback Acquisition Corp. commenced its tender offer for all outstanding shares of common stock of Martek Biosciences Corp. at a price of $31.50 per share.

MPC Muenchmeyer Petersen Capital AG soared 15.55% to €5.19 after the holding company for the Germany-based MPC Group reached an agreement with some of its lending banks for a debt-to-equity swap, designed to strengthen the company's equity base.

Porsche Automobil Holding SE declined 0.34% to €72.83 after the luxury car maker has been upgraded from “neutral” to “buy” by UBS.

Sky Deutschland AG gained 0.04% to €2.41 after the German pay television operator reported robust net subscriber growth in the fourth quarter, as the company witnessed strong consumer demand for its products and services.

Net subscriber growth was 131,000 in the quarter, compared to 39,000 in the year-ago period. For 2010 as a whole, the company added 183,000 subscribers, more than 2.5 times above the 2009 net subscriber growth.

William Morrisons Supermarket Plc fell 0.78% to 267.40 pence after the UK's fourth largest food retailer said that it reached a conditional agreement with Asda to acquire 16 former Netto UK stores at a cost of £28.1 million.