Thursday 26 July 2012

Spanish yields fall amid negative global economic data

Spanish bonds yields finally retreated from recent record highs on Wednesday. The two-year yield fell 47 basis points to 6.42 percent while the 10-year yield declined 25 basis points to 7.38 percent.

Germany’s 10-year yield climbed two basis points to 1.26 percent even though the Ifo institute reported that its business climate index fell to 103.3 in July from 105.2 in June.

In the UK, the economy shrank by a hefty 0.7 percent in the second quarter. However, on a more positive note, the Confederation of British Industry survey's total order book balance rose to -6 in July from -11 in June.

Meanwhile, Japan posted an unexpected trade surplus in June as lower oil prices contributed to a 2.2 percent fall in imports from a year earlier. Exports fell 2.3 percent.

And in a break from recent trend, US housing data came out negative on Wednesday. New home sales fell 8.4 percent to a 350,000 annual rate in June.

However, the May reading was revised up to a 382,000 pace, the highest since April 2010. And Bill McBride thinks that based on the recent trend, June sales will probably be revised up too.

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