Sunday, November 25, 2012

Spain Sells 3.88 Billion Euros Worth of Debt

In an effort to avoid a European bailout, Spain increased its finances by selling 3.88 billion euros worth of debt during an auction concluded last week.

The amount exceeded the maximum target of 3.5 billion euros. In a separate transaction, the country also sold 3.27 billion euros of notes maturing September 2017.

These were sold to Spain’s welfare reserve fund at a yield of 4.792%. At present, the country’s Treasury Department has already sold all of the bonds it had planned to issue for the year, and is still planning to push through with auctions to finance next year’s financial requirements.

Data released by Markit showed that the Euro-zone’s economy was on course to its weakest quarter since 2009. The firm’s latest Purchasing Manager’s Indices came out barely changed overall for the month of November.

The flash service sector PMI dropped to 45.7, lower than markets estimates of 46.0, from 46.0 last October. This figure was also the lowest reading since 2009. Thus far, the print has been below 50—indicating a contraction—for a 10th straight month.

According to Markit, PMIs were as expected given the shrinking economy for the quarter. The one bright spot was the manufacturing PMI, which crept higher to 46.2 beating markets estimates of 45.6 and higher than October’s 45.4 figure.

European equities climbed for a fourth straight day as investor sentiment was boosted by positive manufacturing data from China and on speculation that Athens would initiate a bond-buying program. The FTSEurofirst300 index gained 6 points to close at 1,103.43.

The euro climbed to a three-week high against the dollar following the release of positive PMI data from China and as European leaders prepared to hold more budget talks. The shared currency gained 0.75 cents to close at US$1.2865.