Europe Stay updated with Business News, Pakistan news, Current world news and latest world news with Business Recorder.. http://www.brecorder.com/markets/fixed-income/europe.html Sun, 20 Apr 2014 14:19:18 +0000 SRA Framework 2.0 en-gb France sees firm demand at bond auction, 5-year yield falls http://www.brecorder.com/markets/fixed-income/europe/167865-france-sees-firm-demand-at-bond-auction-5-year-yield-falls.html http://www.brecorder.com/markets/fixed-income/europe/167865-france-sees-firm-demand-at-bond-auction-5-year-yield-falls.html

imagePARIS: France saw firm demand at a medium-term, fixed-rate debt auction on Thursday with its borrowing costs over five years easing.

The Agence France Tresor public debt management agency sold 7.94 billion euros ($10.96 billion) of two- and five-year bonds at a regular auction, with investors putting in total bids worth 15.8 billion.

AFT sold 3.57 billion euros of its five-year bond maturing in May 2019, drawing a yield of 0.86 percent.

That was down from 1.06 percent the last time it was auctioned in March.

AFT also sold 4.37 billion euros of a new two-year bond maturing in November 2016 at a yield of 0.32 percent.

Copyright Reuters, 2014

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Europe Thu, 17 Apr 2014 09:43:30 +0000
Yield on first post-default Greek bond falls to issuance level http://www.brecorder.com/markets/fixed-income/europe/167833-yield-on-first-post-default-greek-bond-falls-to-issuance-level.html http://www.brecorder.com/markets/fixed-income/europe/167833-yield-on-first-post-default-greek-bond-falls-to-issuance-level.html imageLONDON: The yield on the first bond Greece has sold since its 2012 default dipped just below its issuance level on Thursday, as Athens rejoined a rally in peripheral debt markets after a brief period of selling pressure.

The five-year bond, which drew demand almost seven times its size a week ago, faced a tough market debut as investors used the landmark sale as an opportunity to book profits on the euro zone's best performing bonds this year.

The immediate selling pressure after one of the fastest market comebacks ever from default by a sovereign raised worries that Athens' access to private funding remained at the mercy of come-and-go hedge funds.

The dip back to just below the 4.95 percent issuance yield from levels above 5.1 percent it hit earlier this week suggested Greece might after all be able to count on a more stable investor base in the future.

A strong market performance of the bond was key to attracting investors to any future Greek bond sales.

"Probably there were a couple of guys on board who expected to have a quick gain and got out ... maybe a bit too early," said Padhraic Garvey, head of investment grade debt strategy at ING in Amsterdam.

"Ideally you want this bond to trade 4.75 or even 4.5 percent to build confidence. You don't want the yield to go up because it leaves a bad taste in the mouth and reduces the chances of success for other deals."

Garvey said the yield dipped in line with moves in other lower-rated euro zone bond markets.

Yields on Italian, Spanish, Portuguese and Irish bonds traded close to multi-year or even record lows on Friday as the possibility that the European Central Bank may eventually have to fight low inflation with asset purchases increasingly outmuscled any other market drivers for peripheral debt.

Greek 10-year yields last traded at 6.21 percent, having risen from four-year lows of 5.85 percent to just below 6.50 percent in the days after Thursday's bond sale.

The new five-year bond traded at 4.949 percent.

"The rally in peripheral bond markets continued unabated this week and I don't see why Greece should go against the tide," said Mathias van der Jeugt, a strategist at KBC.

Copyright Reuters, 2014

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Europe Thu, 17 Apr 2014 07:58:35 +0000
Spain may use bond switches, buy backs to prevent repayment pile-up http://www.brecorder.com/markets/fixed-income/europe/167520-spain-may-use-bond-switches-buy-backs-to-prevent-repayment-pile-up.html http://www.brecorder.com/markets/fixed-income/europe/167520-spain-may-use-bond-switches-buy-backs-to-prevent-repayment-pile-up.html

imageLONDON: Spain may use bond switches and buy-backs later this year, its head of funding said on Tuesday, aiming to take advantage of cheap rates and stop investors worrying about how it will manage its debt repayments.

Such measures to delay near-term debt redemptions have already been taken by other vulnerable countries in the euro zone like Italy which were forced to concentrate debt issuance in shorter tenors when the sovereign debt crisis hit.

More than half of Spain's 914 billion euro ($1.26 trillion)debt matures within the next four years, according to Thomson Reuters data.

This year, Spain's cost of borrowing over 10 years has dropped to the lowest levels since late 2005. "We are well advanced in our funding programme, and we can think strategically into the next few years.

Therefore, we can dedicate more time to actively managing the debt profile now than before," Pablo de Ramon-Laca, head of funding and debt management at the Spanish Treasury, told Reuters.

"Generally speaking, liability management can be carried out through bond switches, buybacks via auction or syndication."

Spain had issued over a third of its 133.3 billion euros of scheduled bond issuance for 2014 by the end of March.

Asked if steps such as directly buying back bonds approaching maturity or swapping them for longer-dated paper would be taken this year, Ramon-Laca said he would not rule out the possibility.

Liability management, alongside the issuance of longer-term bonds, would help the treasury maintain, or even increase, the average life of its debt. That has been falling since 2010 and turning the trend around is a priority in its 2014 funding strategy.

Ramon-Laca said while the Treasury had not done any 'active' liability management since 2006, it had taken passive measures such as issuing more longer-dated bonds to replace short-dated Treasury Bills.

He cautioned, though, that any future measures would have to make financial sense.

"It is not an obvious decision because improved market conditions enrich bonds that we would be buying in these operations It may not reduce your debt by as much as you may think it will.

Copyright Reuters, 2014

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m.iqbal1967@yahoo.com (Muhammad Iqbal) Europe Tue, 15 Apr 2014 18:36:31 +0000
Greece to sell 1.25bn euros of 3-month T-bills on April 15 http://www.brecorder.com/markets/fixed-income/europe/167137-greece-to-sell-125bn-euros-of-3-month-t-bills-on-april-15.html http://www.brecorder.com/markets/fixed-income/europe/167137-greece-to-sell-125bn-euros-of-3-month-t-bills-on-april-15.html imageATHENS: Greece will auction 1.25 billion euros ($173.51 billion) of three-month treasury bills on April 15 to refinance a maturing issue, the country's debt agency PDMA said on Friday.

The settlement date will be April 22. Only primary dealers will be allowed to participate and no commission will be paid.

Athens has a stock of about 15 billion euros of T-bills that it regularly refinances with the help of crisis-struck Greek banks.

Last month Greece sold three-month treasury paper at 3.10 percent, at the cheapest borrowing cost since January 2010 when its debt crisis escalated.

Copyright Reuters, 2014

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Europe Fri, 11 Apr 2014 12:41:28 +0000
German bond futures rally after US Fed minutes http://www.brecorder.com/markets/fixed-income/europe/166928-german-bond-futures-rally-after-us-fed-minutes.html http://www.brecorder.com/markets/fixed-income/europe/166928-german-bond-futures-rally-after-us-fed-minutes.html imageLONDON: German bond futures opened firmer on Thursday as minutes of the US Federal Reserve's March policy meeting eased some worries the central bank might raise interest rates as soon as next year's first half.

The perceived dovish tone of the minutes was also seen supporting riskier credits, setting up a firm backdrop for Greece's return to the bond market just two years after it defaulted.

Greece launches a new five-year benchmark bond on Thursday via a syndicate of banks and investor interest had already totalled 11 billion euros on Wednesday.

Ireland also sells up to 1 billion euros of 10-year debt on Thursday, its second regular auction since exiting its bailout in December followed by Italy's offer on Friday of up to 7.25 billion euros of three-, seven- and 30-year bonds.

German Bund futures were last ticks 30 ticks higher on the day at 143.56, while Italian bond futures were 18 ticks up at 122.75.

"The Fed minutes were massively dovish, downplaying the market's interpretation of future policy. That's the main driver today," a trader said, adding expectations of easier European Central Bank monetary policy fueled the upbeat market tone.

"It's fairly construcitve stuff for the market overall. We expect (the Greek bond sale) to be massively oversubscribed. That's going to fly."

Copyright Reuters, 2014

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Europe Thu, 10 Apr 2014 07:51:06 +0000
Greece sells 1.3bn euros of 6-month T-bills, yield falls http://www.brecorder.com/markets/fixed-income/europe/166553-greece-sells-13bn-euros-of-6-month-t-bills-yield-falls.html http://www.brecorder.com/markets/fixed-income/europe/166553-greece-sells-13bn-euros-of-6-month-t-bills-yield-falls.html imageATHENS: Greece sold 1.3 billion euros ($1.79 billion) of six-month treasury bills on Tuesday to roll over a maturing issue, the country's debt agency PDMA said.

The T-bills were priced to yield 3.01 percent, down from 3.60 percent in a March auction.

The sale's bid-cover ratio was 3.10, up from 2.31 in the previous sale.

The amount raised included 300 million euros in non-competitive bids.

The settlement date for Tuesday's auction will be April 11.

Monthly T-bill sales are Greece's sole remaining source of market funding.

Athens has a stock of about 15 billion euros of T-bills, which it regularly refinances with the help of Greek banks which buy and then deposit them as collateral to draw liquidity from the ECB.

Copyright Reuters, 2014

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Europe Tue, 08 Apr 2014 10:13:04 +0000
Turkish Treasury mandates banks for eurobond issue http://www.brecorder.com/markets/fixed-income/europe/166510-turkish-treasury-mandates-banks-for-eurobond-issue.html http://www.brecorder.com/markets/fixed-income/europe/166510-turkish-treasury-mandates-banks-for-eurobond-issue.html imageISTANBUL: The Turkish Treasury mandated Deutsche Bank, ING Bank and JP Morgan for the issue of a euro-denominated eurobond maturing in 2023 as part of its 2014 external borrowing program, it said on Tuesday.

Copyright Reuters, 2014

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Europe Tue, 08 Apr 2014 08:13:00 +0000
Greek yields dip as QE speculation swirls, debt sale eyed http://www.brecorder.com/markets/fixed-income/europe/166277-greek-yields-dip-as-qe-speculation-swirls-debt-sale-eyed.html http://www.brecorder.com/markets/fixed-income/europe/166277-greek-yields-dip-as-qe-speculation-swirls-debt-sale-eyed.html

imageLONDON: Greek yields fell to a four-year low on Monday as investors responded to stronger signals that the European Central Bank could embark on asset purchases this year to fight potential deflation.

Investors shrugged off the lack of a statement from Moody's on Friday, when it was widely expected to give an update of Greece's credit ratings under new EU rules requiring rating agencies to lay out the dates on which they review a country's creditworthiness.

Some market participants had expected Moody's to lift Greece's ratings by as much as two notches from Caa3, which is nine notches below investment grade.

Standard & Poor's and Fitch rank Greece six notches below investment grade at B-.

Demand for the country's bonds remained intact in a broadly rallying market after a German newspaper report on Friday added weight to possible bond-buying stimulus in the form of quantitative easing from the ECB.

This came a day after ECB President Mario Draghi said policymakers were unanimous that asset purchases might be needed to tackle persistently low inflation.

"There was some hope that maybe Moody's would change the ratings or at least change the outlook but they haven't done that," said RIA Capital Market strategist.

"Even taking into account the Greek government bond market is doing well and investors are just looking for yield pick-up with the ECB's accommodative stance at this juncture."

Greek 10-year yields were 2 basis points down on the day at 6.12 percent.

They have fallen as much as 50 basis points over the past week as Greece lined up a group of banks for a planned issue of five-year bonds, which could come as early as this week, marking the country's return to the market two years after it defaulted.

Other peripheral euro zone bond yields were mostly lower, with Italian 10-year yields hitting a record low of 3.15 percent on the speculation about potential QE.

German newspaper Frankfurter Allgemeine Zeitung said on Friday the ECB had modelled the effects of buying a trillion euros of assets to ward off deflation.

"At the moment the periphery, especially now we have got this QE talk, is massively supported. That's the most obvious trade in town," a trader said.

Copyright Reuters, 2014

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Europe Mon, 07 Apr 2014 09:14:11 +0000
Bunds, Italian debt rise on speculation of ECB QE http://www.brecorder.com/markets/fixed-income/europe/166246-bunds-italian-debt-rise-on-speculation-of-ecb-qe.html http://www.brecorder.com/markets/fixed-income/europe/166246-bunds-italian-debt-rise-on-speculation-of-ecb-qe.html imageLONDON: German and Italian bond futures rose in early trade on Monday as investors weighed up the possibility that the European Central Bank could embark on a programme of asset purchases this year to support the economy.

Bunds and the rest of the euro zone government bond market rallied sharply on Friday after a German newspaper said the ECB had modelled the effects of buying a trillion euros of assets to ward off deflation.

This followed comments by ECB President Mario Draghi that policymakers were unanimous that asset purchases, also known as quantitative easing, might be needed to tackle persistently low inflation.

"After Friday's stories on QE, that remains the main focus.

At the moment periphery, especially now we have got this QE talk, is massively supported.

That's the most obvious trade in town," a trader said. Italian BTP futures were last 15 ticks up on the day at 123.06 with Bund futures 14 ticks higher at 143.54.

The market will also be watching out for a Greek debt sale which might come as soon as this week, marking the country's return to the market just two years after it defaulted.

Investors were likely to shrug off the lack of a statement from Moody's on Friday, when it was scheduled to review Greece's credit ratings to at least lift them up in line with Standard & Poor's and Fitch.

Copyright Reuters, 2014

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Europe Mon, 07 Apr 2014 07:12:13 +0000
Bund futures rise half-a-point after US payrolls http://www.brecorder.com/markets/fixed-income/europe/165932-bund-futures-rise-half-a-point-after-us-payrolls.html http://www.brecorder.com/markets/fixed-income/europe/165932-bund-futures-rise-half-a-point-after-us-payrolls.html imageLONDON: German Bund futures rose more than half-a-point on Friday after a slightly weaker than expected US jobs report and with investors mulling over the European Central Bank's hints about potential asset purchases.

Nonfarm payrolls increased by 192,000 new jobs last month after rising 197,000 in February, the Labor Department said. Economists had expected a 200,000 increase. Bund futures were last 54 ticks higher on the day at 143.46. "It's positioning ... the market was quite short into these numbers.

It is perceived to be the first clean jobs report that doesn't have the weather effect in it and some people we quite disappointed," one trader said. ECB President Mario Draghi said on Thursday the governing council had discussed the option of printing money at its April policy meeting.

German newspaper Faz reported on Friday the ECB has modelled an asset purchase programme that showed 1 trillion euros of securities buying would increase inflation 0.2-0.8 percent.

Copyright Reuters, 2014

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Europe Fri, 04 Apr 2014 16:21:18 +0000