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Europe mid-morning: Periphery bond yields under pressure

Date: Thursday 28 Jun 2012

Europe mid-morning: Periphery bond yields under pressure

-Spanish 10 year bond yield at 7%
-Italian debt auction on tap
-German official warns against high expectations

FTSE-100: -0.78%
Dax-30: -1.39%
Cac-40: -1.05%
Stoxx 600: -0.72%
FTSE Mibtel: -1.10%
Ibex 35: -0.40%

The major European equity benchmarks have begun today´s session with large losses. That as the European Union´s summit kicks off and with some German government officials having reportedly warned against high expectations. Likewise, and despite those same sources also saying that the focus ought to be on quick and effective aid to Spain, periphery bond yields have started the day higher.

In any case, observers do indeed seem to have tempered their expectations, although perhaps not so all of their worries. In this regard, Bloomberg cites Niall Ferguson, a professor of economic history at Harvard University, as having said that, “the timeframe for financial crises is days. The timeframe for structural reforms is years.”

For their part, analysts at Barclays have aired the following opinion, “we expect these discussions to draw a road map for fiscal, financial and political union, but we do not anticipate any major decisions on concrete short-term measures to reduce market stress beyond what has already been agreed.”

French firms actively restructuring and redeploying



Veolia Environment has sold its regulated UK water business to Rift Acquisitions Ltd. for an enterprise value of £1.236bn as part of its restructuring.

Danone will pay €550m to take control of Morocco's dairy product company Centrale Laitiere.

From a sector stand-point the best performance now on the DJ Stoxx 600 is to be seen in the following industrial goups: chemicals (-1.57%), basic resources (-1.44%) and banks (-1.24%).

Economic data on tap



Spain´s consumer price index for the month of June has come in at a 1.9% year-on-year pace, as expected.

German unemployment rose by 7,000 in June (Consensus: 3,000).

The Eurozone economic sentiment index for the month of June is due at 10AM.

Euro slips



The euro/dollar is now moving down by 0.38% to the 1.2422 mark.

Front month Brent crude futures are falling by 0.83 dollars to the 92.75 dollar per barrel mark on the ICE.

AB

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