It’s been another mixed day – albeit a fairly uneventful one – for European shares. The UK market moved higher despite poor UK manufacturing figures and renewed talk of triple dip recession, but most other exchanges recorded minor losses.
• The FTSE 100 finished at 6510.62, up 6.99 points or 0.11%
• France’s CAC climbed 0.1%
• Germany’s Dax was down 0.23%
• Italy’s FTSE MIB closed down 0.42%
• Spain’s Ibex was 0.26% lower
• The Athens market added 1.23%
Archives of “spain” tag
rssUK And US Among Top 5 Weekly Sovereign Deriskers
The week’s biggest (sovereign) CDS movers have been released, and we have some new entrants in the most endangered species list. While by now nobody will be surprised that the UK is a consistent top 2 player (coming in this week with $319 million in net notional derisking, this making it the 8th week or so the country has made the top 3), only behind Italy and its $452 million in net notional, and just in front of last week’s #1 Brazil, the presence of the United States at #4 should be a little unsettling. It has been months since the US appeared in the top 5. And just like in the long gold case, the same types of existential questions once again arise when the interest in US CDS picks up: who gets to pay off your contracts in the case of an event of default? Elsewhere, the presence of Korea and Turkey (or Australia) in the top 10 should not come as too surprising. On the other end, short covering was violent in CDS of Spain, Hungary and Portugal – Europe’s newest lepers. Is the CDS community concerned the EU can actually pull out a rabbit out of the hat that actually works for once? Hardly. The top 10 reriskers also saw the inclusion of France and long-forgotten insolvent Greece.
Spain sells 3.9bln Euros of 3 -yr bonds
Spain has successfully got away the sale of EUR3.9bln benchmark bonds this morning. Target amount was EUR3-4bln – bid/cover ratio 2.1
Updated at 14:30/10th June/Baroda
A little European Geography lesson
“Spain is not Greece.” Elena Salgado, Spanish Finance minister, February, 2010. “Portugal is not Greece.” The Economist, April 2010. “Greece is not Ireland.” George Papaconstantinou, Greek Finance minister, November, 2010. “Spain is neither Ireland nor Portugal.” Elena Salgado, Spanish Finance minister, November 2010. “Ireland is not in ‘Greek Territory.’”Irish Finance Minister Brian Lenihan. November 2010. “Neither Spain nor Portugal is Ireland.” Angel Gurria, Secretary-general OECD, November, 2010. “Spain is not Uganda” Spanish PM Rajoy. June, 2012. |
Crisis Moves to Hungary?
Sovereign debt worries in Europe have been elevated for a couple of months now, and today Hungary moved into the crosshairs. Sovereign debt default risk as measured by 5-year CDS prices has spiked for Hungary and the countries surrounding it today, but default risk for this region still remains well below levels seen in late 2008 and early 2009. The first two charts below of 5-year CDS for Austria and Hungary since 2008 highlights this. Greece and Portugal default risk remains elevated as well, but at the moment it is still down from its recent peaks. France also remains elevated, but it is still below highs seen in early 2009. The same can’t be said for Spain, however. Spain default risk reached a new crisis high today, taking out levels seen prior to the trillion Euro bailout. And Spain matters much more than Hungary.
Difference Between Lender & Borrower
Rest of the World is busy watching the crisis in the Eurozone and Worried about the Finance to the PIGS Nation. This is the Difference between the Lender and the Borrower ! |
