German 6-month Yield Turns Negative; BMW Sales Rise

Arthi Gupta
09 Jan, 2012
New York City

The European indexes traded lower after Germany sold

[R]1:15 PM Frankfurt – The European indexes traded lower after Germany sold €3.9 billion of short term debt and Italy and Spain are set to sell more in the week. German foreign trade surplus rose in November. BMW sales rose 14.2% in 2011. Banco Santander said it achieved a core capital ratio of 9%.[/R]

The benchmark indexes in Europe traded lower ahead of a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel later today and Germany sold short term debt at a lower yield.

Leaders of France, Germany and Italy will meet in Rome on January 20 to discuss the euro-zone debt crisis.

The European Central Bank said overnight deposits by European commercial banks rose to €463.6 billion, up from a new record of €455.3 billion a day earlier.

Euro-zone investor confidence improved in January and Germany''s trade surplus increased in November.

In Paris trading, the CAC-40 Index declined 10.31 or 0.3% to 3,127.15 and in Frankfurt the DAX Index edged lower 35.54 or 0.6% to 6.022.51.

Italian and Spanish government bond yields rose ahead of auctions from both countries slated for this week.

The Italian 10-year bond yield was at 7.1% and the yield on similar Spanish bonds was at 5.7%.

Germany placed €3.9 billion of its 6-month treasury bills that will mature on July 11 at a yield of -0.0122% versus 0.0005% at a similar auction on December 5. The bid-to-cover ratio fell to 1.8 from 3.8.

The auction attracted bids totaling €7.080 billion.

Euro-zone Confidence Improves

Euro-zone investor confidence improved in January after weakening for five months in a row, results of a survey by Sentix showed. The confidence index was at -21.1 in January compared to -24 in December.

German Surplus Improves

Germany''s trade surplus increased in November as exports logged a better-than-expected growth, the Federal Statistics Office said today.

The foreign trade surplus increased to €16.2 billion in November from €11.5 billion in the prior month. The current account surplus rose to €14.3 billion in November from €10 billion in October.

Exports grew 2.5% from a month ago in November, reversing the 2.9% decrease in October. Imports dropped 0.4% in November, following a 0.1% rise in October.

Gainers & Losers

adidas AG rose 1.2% to €52.34 after the German sports shoes and apparel maker estimated higher sales of soccer products to drive total yearly sales to more than the record €1.5 billion, its chief financial officer Robin Stalker told to German newspaper Boersen-Zeitung.

Air France-KLM fell 1.9% to €3.88 after the Franco-Dutch airline said passenger traffic for December grew 7.5% to 17.97 billion revenue per-kilometers, from 16.71 billion RPKs in the prior year. Load factor for the month was 81.5% versus 80.5% last year.

Akzo Nobel NV climbed 0.1% to €38.10 after the paints and coatings company said it intends to strengthen its position in packaging coatings by exercising the right to buy the remaining shares of Italian based packaging coatings producer Metlac. Financial details were not disclosed.

Banco Santander SA gained 1.3% to €5.52 after the Spanish bank said it achieved a core capital ratio of 9% following a series of measures taken during the last few months, ahead of the European Banking Authority deadline of June 30. The bank also reiterated its goal to reach 10% core capital at the close of June.

BMW AG advanced 1.6% to €56.44 after the German car manufacturer said its worldwide sales of BMW, MINI and Rolls-Royce automobiles for 2011 increased 14.2% to 1.67 million vehicles from 1.46 million vehicles sold in the previous year, helped by sales gains across all regions and in almost all markets.

Novartis AG slid 0.6% to Sfr54.35 after the Swiss pharmaceutical company announced the voluntarily recalls for certain over-the-counter products in the U.S. following consumer complaints of chipped and broken pills as well as mixed tablets due to inconsistent bottle packaging line clearance practices.

Volkswagen AG increased 0.4% to €124.50 after the German carmaker aims to grow its car sales in the U.S. by more than 10% in 2012, according to media reported on Sunday citing a briefing by Jonathan Browning, head of the U.S. division.