By Stephen Kirkland and Shiyin Chen - Dec 1, 2011 5:34 PM GMT+0700
Dec. 1 (Bloomberg) -- David Joy, the Boston-based chief market strategist at Ameriprise Financial Inc., talks about his investment strategy and Europe's sovereign debt crisis. U.S. stocks advanced, driving the Dow Jones Industrial Average up the most since March 2009, after six central banks took action on Europe’s crisis by making it cheaper for lenders to borrow in dollars. Joy speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
Dec. 1 (Bloomberg) -- Stephen Green, Hong Kong-based head of Greater China research at Standard Chartered Plc, talks about China's economy and central bank monetary policy. The People’s Bank of China announced yesterday it will cut the reserve requirement for the nation’s lenders by 0.5 percentage points from Dec. 5. Separately, China’s manufacturing contracted for the first time since February 2009 as the property market cooled and Europe’s crisis cut export demand, a survey showed. Green speaks with John Dawson on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Spanish and French bonds rallied and the euro strengthened for a second day after the governments sold debt. European stocks and U.S. index futures pared losses.
The yield on Spain’s five-year bonds fell 28 basis points to 5.58 percent at 10:30 a.m. in London, with France’s 10-year yield dropping 21 basis points to 3.18 percent. The euro appreciated 0.4 percent against the dollar. The Stoxx Europe 600 Index slipped 0.1 percent, after dropping as much as 0.8 percent. Standard & Poor’s 500 futures slid 0.3 percent, following the stock gauge’s 4.3 percent surge yesterday.
Spain sold 3.75 billion euros ($5.1 billion) of bonds, the maximum amount planned, and French borrowing costs declined in its auction of 10-year notes. European Central Bank President Mario Draghi said the bank’s program of buying government bonds “can only be limited,” a day after six central banks made additional funds available to ease strains from the crisis and the People’s Bank of China cut banks’ reserve requirements for the first time since 2008.
“Sovereign debt will continue to be the focus for the entire market,” Gary Jenkins, head of fixed income at Evolution Securities Ltd. in London, said in a report. “The coordinated move was welcomed by the market, but the fact that central banks saw the need for such measures confirms how serious the bank funding situation is.”
The cost of insuring against default on sovereign debt dropped for a third day with the Markit iTraxx SovX Western Europe Index of credit-default swaps linked to 15 governments dropping eight basis points to 359 basis points.
The French government sold 1.57 billion euros of 10-year bonds at an average yield of 3.18 percent, the Bank of France said. At its last auction on Nov. 3, the average yield was 3.22 percent. The average yield on Spain’s five-year bonds due January 2017 was 5.544 percent, compared with 4.848 percent when notes with a similar maturity were auctioned on Nov. 3.
Fed Move
U.S. futures signal the S&P 500 will halt its steepest three-day rally since March 2009. The gauge jumped yesterday after the Federal Reserve said in a statement the premium banks pay to borrow dollars overnight from central banks will fall by half a percentage point to 50 basis points. The so-called dollar swap lines will be extended by six months to Feb. 1, 2013.
The yield on 10-year Treasuries rose three basis points, after jumping eight basis points to 2.07 percent yesterday.
----With assistance from Matthew Brown and Michael Shanahan in London. Editors: Stephen Kirkland, Stuart Wallace
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Shiyin Chen in Singapore at schen37@bloomberg.net
To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net
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