There was relief in markets on Wednesday after European banks indicated that they may not be as desperate for ECB money as initially feared. Bloomberg reports:
German government bonds fell after the European Central Bank loaned institutions less money than some analysts expected, damping demand for safety and restoring optimism that the region will weather the sovereign-debt crisis.
The two-year German note snapped two days of gains after lenders asked the ECB for 131.9 billion euros ($162 billion) of three-month loans before a 12-month facility is repaid tomorrow. Barclays Plc estimated before the release that banks would ask for 250 billion euros to 300 billion euros, with a figure in the higher end of that range indicating institutions were still finding it hard to fund themselves. Germany also sold 4.94 billion euros of two-year securities today.
Economic data from the US continue to point to slower growth though. Reuters reports:
U.S. private employers added only 13,000 jobs in June, a report by payrolls processor ADP Employer Services showed on Wednesday, well below the 60,000 jobs economists had expected in a Reuters survey and below May's level...
The Institute for Supply Management-Chicago business barometer fell to 59.1 in June from 59.7 in May, and economists had forecast a June reading of 59.0. A reading above 50 indicates expansion in the regional economy.
In a less encouraging sign, applications to buy homes dropped 3.3 percent to hover just above 13-year lows, the Mortgage Bankers Association said, despite low borrowing costs and home prices average about 30 percent less than their peaks four years ago.