By Stephen Kirkland - Nov 16, 2011 9:01 PM GMT+0700
Nov. 16 (Bloomberg) -- Fabrizio Fiorini, chief investment officer at Aletti Gestielle SGR SpA talks about the outlook for Italian bonds. He speaks from Milan with Owen Thomas on Bloomberg Television's "Countdown." (Source: Bloomberg)
Nov. 16 (Bloomberg) -- Daphne Roth, Singapore-based head of Asian equity research at ABN Amro Private Bank, talks about the impact of Europe's debt crisis on Asian equity markets and her asset allocation. Roth speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Nov. 16 (Bloomberg) -- Nader Naeimi, a Sydney-based strategist for AMP Capital Investors Ltd., talks about the impact of Europe's sovereign debt crisis on global financial markets and his investment strategy. Naeimi speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
Nov. 16 (Bloomberg) -- Charles Mounts, a managing director at Knight Capital, talks about Spain's bank turmoil and the contrast to other European sovereign debt problems. Mounts speaks with Sara Eisen and Stephanie Ruhle on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
U.S. index futures and the euro fell as the Bank of England said failure to resolve Europe’s debt crisis may have “significant adverse effects” on the economy. The cost of insuring government bonds declined from records as the European Central Bank bought Italian and Spanish notes.
Standard & Poor’s 500 Index futures sank 1 percent to 1,241.5 at 8:59 a.m. in New York and the Stoxx Europe 600 Index slipped 0.3 percent. Credit-default swaps insuring Italian, Spanish and Belgian debt fell from all-time highs, and Italy’s 10-year yield decreased. The euro depreciated 0.5 percent to $1.3476. Oil topped $100 a barrel for the first time since July before a report forecast to show crude inventories declined.
“The European bond market is becoming very binary, and ECB-dependent,” said Mohit Kumar, head of European interest- rate strategy at Deutsche Bank AG in London. “Whenever the ECB steps in, the market likes it. When it steps back, you see pressure. There are no real buyers.”
Britain faces a “markedly weaker” outlook for the economy and persistent danger from Europe’s debt crisis, Bank of England Governor Mervyn King said today. The ECB bought larger-than- usual sizes and quantities of Italian debt, said two people with knowledge of the trades, who declined to be identified because the deals are private. Italian Prime Minister-designate Mario Monti will present his Cabinet today. U.S. industrial output probably increased last month, economists said before a Federal Reserve report.
Collateral Range
Two shares fell for every one that gained in the Stoxx 600. Electricite de France SA slid 4.6 percent as the nation’s opposition Socialist and Green parties united to campaign for the closure of 24 nuclear reactors by 2025. Vivendi SA, the owner of the world’s largest video-game and music companies, advanced 3.7 percent after reporting profit that exceeded analysts’ estimates.
The S&P 500 climbed 0.5 percent yesterday. The Fed report at 9:15 a.m. in Washington may show industrial production climbed 0.4 percent in October, twice as much as the previous month, according to a Bloomberg survey of economists. Other data may show the cost of living was little changed, restrained by falling energy prices.
Credit-default swaps on Italy dropped nine basis points to 586, contracts on Spain were down seven basis points at 474 and Belgium’s fell one to 343.
The yield on the 10-year Italian security declined nine basis points to 6.98 percent, while the equivalent-maturity Spanish yield added three basis points. French 10-year borrowing costs relative to benchmark German bunds retreated from a euro- era record.
Money Markets
The three-month cross-currency basis swap, the rate banks pay to convert euro payments into dollars, increased to 122.5 basis points less than the euro interbank offered rate, the most expensive cost since December 2008. The measure was 119.5 basis points under Euribor yesterday.
The pound slid for a third day against the dollar after a report showed U.K. unemployment rose in the three months through September as joblessness among young people climbed above 1 million for the first time since at least 1992. The jobless rate climbed to a 15-year high of 8.3 percent.
The MSCI Emerging Markets Index fell 1.1 percent. The Hang Seng China Enterprises Index in Hong Kong tumbled 2.9 percent, while Taiwan’s Taiex Index fell 1.4 percent. South Korea’s Kospi Index (KOSPI) dropped 1.6 percent.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net
To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net
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