BLBG:Commodities Climb After Europe Drops Conditions On Spanish Loans
Commodities advanced after Euro-area leaders agreed to ease repayment rules for emergency loans to Spanish banks and relax conditions on potential help for Italy as German Chancellor Angela Merkel gave in on expanded steps to stem the debt crisis.
The Standard & Poor’s GSCI Spot Index of 24 raw materials increased as much as 1.3 percent to traded at 574.88 points at 11:54 a.m. in Singapore before trading at 573.87, trimming the loss since March to 17 percent. That’s the worst three-month showing since the 44 percent drop in the final quarter of 2008 when the bursting of a U.S. real-estate bubble and collapse of Lehman Brothers Holdings Inc. pitched the world into recession.
After 12 hours of talks ending at 4:30 a.m. in Brussels today, leaders of the 17 euro countries dropped the requirement that governments get preferred creditor status on crisis loans to Spain’s blighted banks, European Union President Herman Van Rompuy said. Banks can also be recapitalized directly with funds rather than going through governments, he said.
Euro-area leaders also discussed ways to reduce the risk premiums on Italian and Spanish bonds, which have driven concern by economists, investors and Europe’s global partners including the U.S. that the currency union risks coming apart.
To contact the reporter on this story: Chanyaporn Chanjaroen in Singapore at cchanjaroen@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
