Eurozone angst over soaring Spanish
bond yields has been somewhat muted following upbeat economic data out
of China. Spain’s benchmark 10-year bond yield has hit a new record high
of 7.625% heightening concerns that the regions fourth-largest
economy will need a full blown bailout to stave off a collapse of its
banking sector. Moody’s didn’t help the situation after the ratings
agency relegated the outlook on Germany, the Netherlands and Luxembourg
to “negative” citing concerns that we’re all pretty
much aware of. Data released earlier today indicates European
manufacturing activity continues to contract, adding to investors’
worries. However, outweighing the current issues across the pond were
reports that China’s PMI moved up to 49.5. This indicates
that the world’s #2 economy is swinging back towards expansion but may
need more stimulus to help it get over the hump. The change in direction
of China’s manufacturing sector could likely be attributed to recent
interest rate cuts but many worry that such
measures by the PBoC are simply short-term fixes as long-term solutions
seem to remain elusive. More corporate earnings are on tap for the U.S.
markets with tech behemoth, Apple set to report after the close. The
Housing Price Index for May, as reported by
the Federal Housing Finance Agency, will be released at 10:00 a.m. EST.
Have a great day!
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