Overnight Highlights - September 17, 2010
BNP Paribas - Equities more or less treaded water, closing mixed in the US and generally lower in Europe. The VIX as down 0.38 points to 21.72. USD traded weaker; DXY fell 0.3% to 81.25 on the day. Gold prices soared above $1,273 an ounce, as currency market jitters and broader economic uncertainty enticed more investors towards the precious metal. Benchmark bonds traded higher in yield. The 10Y US Treasury added 4 bp to 2.763%; the 10Y Bund added 7 bp to 2.475%. The US 2s10s spread is at 228 bp. The price of Investment Grade credit traded flat at 99.84% of par; the price of High Yield credit did as well and exchanges hands at 98.19% of par. US 2Y swap spreads widened 0.6 bp to 20.5 bp. The TED Spread tightened by 0.5 bp to 0.14%; 3M Libor-OIS holds just above 10 bp.
In Europe, the Swiss National Bank said it would maintain its “expansionary monetary policy,” but left its target range for 3M Libor unchanged at 0% to 0.75% with the intention of maintaining the rate “within the lower part of the target range at around 0.25%.”
The Spanish government sold 4 billion Euros of 10Y and 3Y bonds, seeing greater demand from investors even though yields were lower than in the previous sale.
UK August Retail Sales dropped 0.5% from July, when they rose 0.8%. Markets predicted a 0.3% increase. On the year, sales rose 0.4%, the least since April.
Inflation in Britain unexpectedly held at 3.1% in August, exceeding the government’s 3% upper limit for a sixth month. The retail deflator showed a 1.5% annual price increase. A Bank of England report overnight
also showed Britons’ expectations for consumer price gains in the next 12 months rose to the highest level since August 2008. UK consumers expect prices to increase 3.4% over the next year. That compares with
expectations in May of a 3.3% increase.
The Spanish government sold 4 billion Euros of 10Y and 3Y bonds, seeing greater demand from investors even though yields were lower than in the previous sale.
UK August Retail Sales dropped 0.5% from July, when they rose 0.8%. Markets predicted a 0.3% increase. On the year, sales rose 0.4%, the least since April.
Inflation in Britain unexpectedly held at 3.1% in August, exceeding the government’s 3% upper limit for a sixth month. The retail deflator showed a 1.5% annual price increase. A Bank of England report overnight
also showed Britons’ expectations for consumer price gains in the next 12 months rose to the highest level since August 2008. UK consumers expect prices to increase 3.4% over the next year. That compares with
expectations in May of a 3.3% increase.
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