11 June 2012: Stocks rally hard after Spanish bailout

Markets- Stocks rise after Spanish bailout, Commodities get firm: Almost a €100 bn bank bailout in Spain sees calm restored and stocks and the Euro are rallying hard.
•    Stocks: FTSE All World gained 1.1%, as FTSE Eurofirst enjoys a gain of 1.7%; In Asia mood is bullish as FTSE Asia Pacific gained 2.23% and higher-beta Tokyo’s Nikkei gained 2%; S&P 500 looks to gain 1.3% on the opening bell; FTSE 100 has gained 0.95% to 5486
•    Currencies: Euro perks up to $1.2594 against Dollar; Sterling against dollar is up to $1.5541
•    Debt: The German Bunds picked up 7bp to 1.38% while US 10-years have gained 6bp to trade at 1.69%; Spain’s yields 11bp have dropped to around the 6.10% mark
•    Commodities: Brent Crude gained 1% to $100.47/barrel; Copper gained 2.1% today to sit at $3.35/pound; Gold is slightly higher at $1590/ounce

Global Economy
•    Spain in €100 bn bailout: Spain have sought almost €100bn from the EU rescue fund to recapitalise their banking sector. Their PM has said that avoiding a full scale bailout was essential and that these loans combined with budget prudence will eventually help Spain overcome the crisis. Stock indices all over the world responded positively following this, and Madrid’s own Ibex index jumped over 4%. The allocation of loans which will be finalised in about a month, however, depend solely on the discretion of the European Commission and not the Spanish government


•    Goldman nears sale of Hedge Fund admin unit: Goldman Sachs group is close to a deal with State Street over the sale of its Hedge Fund admin unit. This sale will create the largest hedge fund admin unit all over the world. The combined business will have nearly $700bn under administration, more than the current market leader Citco.


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