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Markets up on successful Spanish bond auction

The FTSE was anticipated to move into positive territory this morning following a fairly sizeable loss of 2% yesterday. A successful five year Spanish bond auction also helped calmed nerves, the yield of 4.02% dropping considerably from an equivalent sale at the start of the month. The troubled country managed to sell double its target in an event that contrast starkly with the negative concerning Italian auction yesterday.

US jobless claims fell to a three year low with the number of citizens claiming unemployment benefit dropping to 366,000 last week, from 385,000 the week before. Despite the positive number, some commentators cautioned that the figure is often volatile around Christmas and could increase significantly post the festive season as particularly retail employees are laid off. Half an hour later however more positive data was released, this time in the form of the Philadelphia Fed Manufacturing Index. This measure of business came in at 10.30, more than double the forecast of 5.00 and considerably higher than the previous reading 0f 3.60. A level above 0 indicates improving conditions and adds to a raft of recent data that hints towards a more optimistic outlook for the US economy.

With indices globally trading rather buoyantly, comments from the IMF’s Christine Lagarde undermined sentiment, investors concerned by her assessment that the euro-zone crisis was getting worse and that no country or region was immune. She added that the risks of inaction would include elements reminiscent of the 1930’s depression, something that did not sit too well considering perceived political inability to stem the crisis.

Despite this, the UK market managed to finish comfortably in positive territory with a 0.63% gain that saw it close at 5400. The CAC and DAX were closer to 1% and US indices were trading around 0.4% at the time of writing.

This was posted in Bdaily's Members' News section by John Dance .