BLBG:Stocks, Commodities Drop While Spanish Bond Yields Rise
Spanish bond yields climbed to a four-month high ahead of a debt auction tomorrow, while commodities fell and European stocks rose. The yuan slid after China doubled the currency’s trading band against the dollar.
Spanish 10-year bond yields rose 14 basis points to 6.12 percent as of 8:22 a.m. in London, the highest level since December. The Stoxx Europe 600 Index added 0.1 percent, while the MSCI All-Country World Index (MXWD) dropped 0.3 percent and futures on Standard & Poor’s 500 Index declined 0.1 percent. The euro fell 0.6 percent to $1.3005, while the yen strengthened against all of its major peers. The S&P GSCI Index of commodities slid 0.9 percent. Copper fell 1.3 percent to a three-month low.
Spain is scheduled to sell debt tomorrow and on April 19 as the nation’s borrowing costs approach levels that prompted Greece, Ireland and Portugal to seek bailouts. South Korea’s central bank cut its growth estimate for Asia’s fourth-largest economy, citing higher oil prices and a slower global recovery. The People’s Bank of China on April 14 increased the flexibility of its exchange rate for the first time since 2007.
“If Spain’s yields continue to rise, then they’re going to get to a point where they may well need some form of assistance, as Greece did,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp. “The euro does look like it’s vulnerable to breaking down a lot further in the short term.”
To contact the reporters on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net; Masaki Kondo in Singapore at mkondo3@bloomberg.net.
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.
