Europe close: Matters are now in governments' hands, Draghi says
Thu 04 Oct 2012
LONDON (SHARECAST) - -Draghi: Euro is irreversible
-Eurozone considering bond insurance for Spain-Reuters
-Spanish 10 year bond yields rising by 9bp to 5.90%
-Bank of Spain’s governor puts country’s 2012 fiscal targets slightly in doubt
-Slovenia struggles not to become sixth country to ask for a rescue-Bbg
European equities have finished the session mixed after today’s meeting of the European Central Bank’s (ECB) governing council saw President Mario Draghi reiterate that risks to economic activity continue to lie on the downside. This after beginning his remarks by stating –again- that the single currency is ‘irreversible.’
No less relevant, he repeated that matters are now in governments’ hands, both as regards asking for aid as well as in establishing the limits for the same (in reference to so-called legacy assets).
Worth pointing out, this morning’s Spanish Treasury debt auction failed to inspire markets, although it came in quite solidly. That as The Telegraph reported that senior officials from Germany and other parts of the Eurozone's AAA core have warned Spain privately that angry parliaments are likely to impose stringent conditions on any further rescue loans. Fear of escalating demands by Germany, Finland and Holland is a key reason why Spanish premier Mariano Rajoy continues to drag his feet on a full sovereign bail-out.
Linked to the above, the Governor of Spain’s central bank –Luis Linde- called into question -slightly- Madrid’s ability to hit its fiscal targets for this year and next. At the same time Mr.Linde urged authorities to reconsider their plans to increase pension payments this year. Nevertheless, and despite the above, the banker believes the situation is manageable.
State-owned EdF going on hiring spree
Nobel Biocare fell 4% after saying a drop in the Japanese market in the third quarter is “materially impacting” full-year sales and profit.
Telefonica plans to reduce its fleet of private jets as part of an effort to lower costs.
EdF has said it will hire 6,000 workers in France this year.
ThyssenKrupp is up after a report that Korean steelmaker Posco submitted a letter of intent for its American unit.
From a sector stand-point the best performers on the DJ Stoxx 600 were: Automobiles (1.89%), Travel (0.50%) and Personal and Household Goods (0.44%).
Single currency bounces back following Draghi
The euro/dollar is now up by 0.84% to the 1.3018 level.
Front month Brent crude futures are rising by 3.96 dollars to the 112.62 dollar per barrel mark on the ICE.