The cost to insure company debt from default fell to a nine-month low in Europe on optimism Greece’s bond buyback will unlock aid and the Federal Reserve will announce steps to stimulate economic growth.
The cost of insuring European debt against default is heading for the biggest weekly drop since September amid optimism European leaders will let Greece get its next aid installment and on new signs of economic recovery.
Spain’s bonds fell, pushing five- and 10-year yields to euro-era records, as the nation’s borrowing costs rose at an auction amid concern its banks’ and regions’ debts will force it to seek a sovereign bailout.
The electoral map, the demographics behind President Barack Obama’s re-election and the high-end tax increases that were just wrung from the Republicans give Democrats reason to believe that long-term political trends are on their side in budget negotiations. This view, however, ignores what is happening at the state level.
Germany’s bonds rose, with 10-year yields dropping the most in a week, after a report showed the nation’s exports fell more than analysts forecast on concern the debt crisis is weakening economies across the region.
Spain’s government bonds advanced, pushing 10-year borrowing costs to the lowest in more than six months, after Moody’s Investors Service said it would keep the nation’s credit rating at investment grade.