20 July 2012: Stock rally ended, Spain’s yields shoot up again

Markets– Stocks see sellers, Commodities mixed: A 3-day stock rally was ended as growth concerns spurred investors to sell growth-focussed assets. Spanish bond yields also shot up again, as economic concerns persist globally.
•    Stocks: FTSE All World fell 1.2%, as FTSE Eurofirst slipped 1%; In Asia too, mood is  bearish as FTSE Asia Pacific lost 0.5% and Tokyo’s Nikkei fell 1.43%%; S&P 500 closed with a loss of 1%; FTSE 100 added 1% to 5685
•    Currencies: Euro is lower 0.9% at $1.2163; Sterling against dollar was unchanged at $1.5618
•    Debt: The German Bunds have lost 6bp to sit at 1.16% while US 10-years lose 5bp owing to demand for safe havens at 1.46%; Spanish bond-yields shot up 27bp to 7.28%
•    Commodities: Brent Crude is down 1.2%% to $106.53/barrel; Copper crashed 2.5% to sit at $3.45/pound; Gold advances 0.1% to $1582/ounce

Global Economy

•    Concerns persist in Spain: Despite Spain’s banks being provided with monetary easing of upto €100bn, concerns exist about Spain’s ability to recover at all. The government also said that the economy is expected to contract 0.5%, and unemployment will stay at current levels, of 1 in 4 people unemployed. The bond yields shot up a staggering 27bp to 7.28%.

Companies

•    BofA executive charged: An ex-employee of Bank of America has been charged as a part of a long running investigation into bid-rigging in the municipal bond market. Phillip Murray is being alleged to have colluded with a broker and other co-conspirators in an attempt to defraud the issuers by manipulating the bidding process.

 

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