Tag Archives: Central / Eastern Europe

UPDATE sells Euro-2 zone bonds; Italy has set the best month since May | Instant News


* Eurozone periphery government bond yields tmsnrt.rs/2ii2Bqr (Updates throughout)

By Elizabeth Howcroft

LONDON, July 31 (Reuters) – Eurozone government bonds were sold on Friday, both in the core and periphery, with Italian 10-year bonds set as the worst day since early May but still producing strong performance throughout the month.

With the market widely cautious on Friday, analysts said the sell-off could be triggered by an unusual month-end flow.

“I attribute it to long-term, long-term positions from dealers who may be mistaken because of the sale of real cash flow,” said Peter Chatwell, chief of multi-asset strategy at Mizuho.

Analysts were surprised by the move, because the month-end index extension – where funds rebalanced their portfolios to reflect activity during the month – was expected to support bonds at the start of the session.

Italian 10-year yields are at their highest level in more than a week, up 6 basis points (bps) at 1.092% at 1449 GMT.

However, Italian bonds have experienced a decent month, with yields set down 24 bps in July – the best month since May. The paper demand was driven by recovery funds agreed by the European Union last week.

The 750 billion euro fund, which will partly be offered as a grant to the member states hardest hit by the coronavirus, has been hailed as a game changer for the eurozone and has increased Italy’s debt, given concerns about the country’s sustainability. loan.

Italy’s risk premium pays Germany for 10-year debt falling to March lows when the fund was agreed, although it has risen again this week, and is 3 bps wider on Friday at 160.65 bps.

Mizuho Chatwell said the Italian rally that was easing this week could be due to oversupply.

“What happened to BTP was a bit exhausted after recording a number of supplies,” he said.

“I think the market is now saturated with this positivity, but supply continues to run,” he added.

The 10-year German Bund benchmark was set for the best month since April, as investors flocked to safe-haven debt, pushing yields below -0.5%.

Safe-haven bonds are likely to remain supported given the increasing number of coronavirus cases around the world, raising fears of new lockouts.

Global fund managers prefer to cut equities to their lowest level in four years in July while keeping bond allocations unchanged, as hopes for economic recovery fade, a Reuters poll shows.

Data on Thursday revealed a record contraction in Germany – the region’s leading economy – and sent Bund results to two and a half month lows, but there was little reaction on Friday to the euro zone GDP estimates.

But euro zone inflation suddenly rose in July, supporting the European Central Bank’s expectations that negative headline readings could be avoided. (Reporting by Yoruk Bahceli and Elizabeth Howcroft; editing by Gareth Jones and Mark Potter)

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Germany warns against trips to three regions of Spain hit by the virus | Instant News


FILE PHOTOS: People enjoy fine weather on the coast of Barceloneta, after regional authorities of Catalonia and the city council announced restrictions to restrain the spread of coronavirus (COVID-19) in Barcelona, ​​Spain July 19, 2020. REUTERS / Nacho Doce / Photo File

BERLIN (Reuters) – The German foreign ministry on Friday advised people not to travel to the northern Spanish region of Catalonia, Navarre and Aragon, because of fears that travel could bring a second wave of COVID-19 infections.

The Robert Koch Institute, a German public health agency, places all three regions of Spain on a list of high-risk locations, which means people returning to Germany are required to quarantine for 14 days or give a negative corona virus test.

With the increasing number of viruses in Germany, concerns are growing that tourists returning from destinations experiencing a surge in new cases can spread the infection quickly. Germany reported 870 cases of the corona virus on Friday, the highest daily total since mid-May.

Starting next week, Germany plans to make a mandatory corona virus test at the airport for all tourists returning from high-risk areas to slow the spread of infection.

The travel warning is the latest blow to the Spanish economy, which is already in a steep recession and is dependent on tourism for 12.3% of its economic output. Germany makes about 5% of tourists to Catalonia’s main city, Barcelona in 2019, according to the city’s tourism activity report.

Germany’s travel warnings are following in the steps by other European countries to limit travel from Spain, especially Britain, which is the largest share of foreign visitors. It has introduced a 14-day quarantine on all arrivals from Spain and recommends it to all but important trips to mainland Spain. Norway also enforces a 10-day quarantine.

France has advised against traveling to Catalonia.

Reporting by Caroline Copley; Additional reporting by Emma Pinedo Gonzalez in Madrid; Editing by Michelle Martin and Peter Graff

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Germany warns against trips to three regions of Spain hit by the virus | Instant News


BERLIN (Reuters) – Germany’s foreign ministry has warned against unnecessary travel to Spain’s Catalonia region – home to Barcelona -, Aragon and Navarre on Friday.

People returning to Germany from this region will be required to go to quarantine for 14 days unless they can give a negative test for COVID-19, the foreign ministry said on its website.

Reporting by Thomas Seythal and Caroline Copley

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China warns Britain: You have no future if you try to put China aside | Instant News


LONDON (Reuters) – The Chinese ambassador to London frankly warned Britain on Thursday that they have no future if they try to separate themselves from the communist state.

“It’s hard to imagine a ‘Global Britain’ that bypasses or excludes China, separating from China means separating from opportunities, separating from growth and separating from the future,” Chinese ambassador to London Liu Xiaoming told reporters.

He said Britain would “pay the price” if it wanted to treat China as a hostile country.

Reported by Guy Faulconbridge and Kate Holton

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Germany: Coronavirus vaccine might not be widely available before mid-2021 | Instant News


BERLIN, July 29 (Reuters) – German Research Minister Anja Karliczek said on Wednesday that a coronavirus vaccine might not be widely available before the middle of next year.

“We must continue to assume that vaccines for the wider population will only be available from the middle of next year,” he told a news conference. (Reporting by Reuters Television Writing by Michelle Martin, edited by Thomas Escritt)

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The German Bund Safe-haven is supported by US / Chinese tensions | Instant News


* Eurozone periphery government bond yields tmsnrt.rs/2ii2Bqr

By Dhara Ranasinghe

LONDON, July 27 (Reuters) – The benchmark 10-year German bond yield slumped Monday as a sign that jitters in world markets over rising US / China tensions pushed investors into safe haven assets.

China took over the place of the US consulate in the southwestern city of Chengdu on Monday, after ordering the facility to be vacated in retaliation for last week’s dismissal from its consulate in Houston, Texas.

Worsening relations between the two biggest economies in the world pushed safe havens such as gold and government bonds, allowing German debt to recover from price losses on Friday triggered by stronger-than-expected purchasing manager data (PMI).

Yields on German 10-year bonds were last down about 1.5 basis points at -0.456%, after rising 4 bps on Friday.

“Risk assets are struggling … while for the Bunds the textbook reaction to the PMI combined with another failed test of the -0.50% level leaves 10-year results in the middle of the range,” said Commerzbank pricing strategist Michael Leister.

Italian bond yields are slightly lower, with sentiment towards the periphery supported by increasing confidence that aggressive fiscal and monetary stimulus in the euro area will help dampen its economy from coronavirus attacks.

Yields on Italian 10-year bonds dipped to 1.06%, holding close to the lowest level of 4-1 / 2 months last week. The gap over the 10-year benchmark German Bund yields briefly narrowed to around 148 bps, the most stringent in five months.

European Union leaders last week reached an agreement on a 750 billion euro ($ 878 billion) COVID-19 recovery fund, agreeing to raise billions of euros on the capital market on behalf of all 27 countries, in an act of unprecedented solidarity.

“We think that (the spread of Italian / German bond yields) can tighten 15-20 bps from here, the amount becomes less important than the direction,” said Jorge Garayo, senior level strategist at Societe Generale. “This recovery fund is important because it marks a very important step towards something that was previously taboo – fiscal transfers.”

$ 1 = 0.8542 euros Reporting by Dhara Ranasinghe Editing by David Holmes

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Germany to test people returning from countries at high risk for coronavirus | Instant News


BERLIN, July 24 (Reuters) – Health ministers from German countries agreed on Friday to ask people returning from high-risk countries to take coronavirus tests at airports or face quarantine for two weeks as part of efforts to prevent waves new infection.

Anyone who cannot show negative test results will be asked to go to quarantine for 14 days, Berlin’s Health Minister Dilek Kalyci told reporters after a meeting of state ministers. (Reporting by Caroline Copley, editing by Thomas Escritt)

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UPDATE 2-Italian bonds are set for the best week in two months | Instant News


* Italian 10-year bond yields fell 16 bps this week

* Set for the biggest weekly decline in 2 months

* German Bund results briefly touched 2-month lows of -0.499%

* Eurozone periphery government bond yields tmsnrt.rs/2ii2Bqr (Add comments, update prices to close)

By Dhara Ranasinghe

LONDON, July 24 (Reuters) – The Italian bond market is ready for the best week in two months on Friday, even as borrowing costs rise from 4-1 / 2 month lows set after this week’s agreement on a European Union recovery fund to support the economy hit by coronavirus.

Bond yields across the euro zone rose after data showing eurozone business activity recovered in July and signs of rising US / Chinese tensions prompted investors to take profits on rising prices this week and yields fell.

Yields on Italian 10-year bonds rose 2 basis points to 1.07%, from Thursday’s low of around 1.04%.

However, Italian yields fell around 16 bps this week, set for the biggest weekly decline in two months. According to Tradeweb data, Italian 10-year bond yields fell below 1% on Thursday for the first time since March.

Yields on Spanish and Portuguese 10-year bonds are down about 6 bps this week, Greek yields have fallen 10 bps.

“The impact of the recovery fund is not fully appreciated and is still not fully appreciated,” said Peter Chatwell, head of multi-asset strategy at Mizuho. “The structural part of this story is that it allows the risk of the euro to split to a level that has not been seen for some time.”

In Germany, yields rose from two-month lows after the euro zone flash Composite Purchasing Managers Index (PMI), seen as a good indicator of economic health, rose to 54.8, the highest since mid-2018 and above forecasts. The final reading for June is 48.5.

The 10-year Bund yield held up to 4 bps at -0.44%, after briefly touching a two-month low in early trade around -0.50% because German bonds also benefited from renewed optimism about the euro area.

Three forces seem to play a role – a strong fiscal response, an aggressive stimulus from the European Central Bank, and a perception of better handling the health crisis versus the United States.

It also helped raise the euro to 21-month highs against the dollar this week.

European Union leaders on Tuesday approved a 750 billion euro recovery fund, which according to Italian Prime Minister Giuseppe Conte would allow his government to change Italy. Italy and Spain, the two countries hardest hit by the pandemic, are among the biggest beneficiaries of the agreement.

“We think the Recovery Fund is a key element for Europe’s response to the shock. The ECB is helping to cope with large funding needs but cannot replace every foreign investor in the periphery, “analysts at BofA said in a note.

Reporting by Dhara Ranasinghe; edit by Larry King and Steve Orlofsky

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The Swiss Attorney General offered to quit after the court closed the FIFA meeting | Instant News


ZURICH (Reuters) – Swiss Attorney General Michael Lauber offered to resign on Friday after the court concluded that he covered a meeting with FIFA chief Gianni Infantino and lied to supervisors while his office investigated corruption around the soccer governing body.

FILE PHOTO: Swiss Attorney General Michael Lauber arrived for interrogation by the Swiss Parliamentary Judicial Committee as part of a process that could lead to his impeachment, after criticism of the handling of investigations into alleged corruption around the FIFA soccer body, in Bern, Switzerland, May 20, 2020. REUTERS / Arnd Wiegmann

The 54-year-old, who has been the most senior state lawyer in Switzerland since 2012, denies lying but offers to resign to protect the reputation of his institution.

“If they (the court) don’t believe me as the attorney general, then the Attorney General’s Office will be harmed,” he said in a statement.

Lauber has remained steadfast in his work despite suppressing reports from government monitors and calling to quit activists due to slow progress in corruption cases ranging from Petrobras Brazil to 1MDB state funds.

Narrowly re-elected last year, he also faced a parliamentary impeachment process, while the special prosecutor was reviewing criminal complaints against him.

“For a long time, Lauber had to leave, he had systematically destroyed the institution of the Attorney General’s office,” said Mark Pieth, a law professor who is the most famous corruption fighter in Switzerland.

“Although FIFA is very interesting, things that are very serious for Switzerland as a financial center are cases like 1MDB and Petrobras … Very embarrassing, it took a long time for him to leave.”

THREE MEETINGS WITH INFANTINO

The final straw for Lauber came on Friday when the Federal Administrative Court said he committed several breaches of duty, lied to investigators and made “unreasonable” statements about meetings with Infantino, who denied having made a mistake.

Upholding only a portion of his appeal against the sentence of the Supervisory Authority for the Office of the Prosecutor General, the court reduced the sentence deduction in Lauber’s payment.

While Lauber has acknowledged two meetings with Infantino in 2016, he denied the third meeting reported by the media took place in 2017, prompting disciplinary investigations by the agency that oversees the attorney general’s office.

He then said he did not remember the third meeting but that it must have happened based on diary entries and text messages.

FIFA was involved in the worst corruption scandal in its history in 2015 which caused its president Sepp Blatter to be banned from sports while several dozen officials were charged in the United States on corruption-related charges.

A member of the Swiss parliamentary justice committee welcomed Lauber’s decision. “In his position the attorney general must be above suspicion and that would be damaging if he remained,” Ursula Schneider Schuettel told Reuters.

FIFA did not immediately respond to requests for comment.

Reporting by John Revill; Editing by Michael Shields

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Italian bonds are set for the best week in two months | Instant News


* Eurozone periphery government bond yields tmsnrt.rs/2ii2Bqr

By Dhara Ranasinghe

LONDON, July 24 (Reuters) – The Italian bond market is ready for its best week in two months on Friday, with borrowing costs holding near 4-1 / 2 month lows after an EU recovery fund agreement that will provide support to economies like Italy devastated by coronavirus.

Even US-Chinese tensions that have weighed on investor sentiment and world stock markets failed to place a significant decline in the southern European bond market, which tends to move in line with world risk assets.

Italian 10-year bond yields stabilized around 1.05%, holding near Thursday’s 4-1 / 2 lows at 1.04%. According to Tradeweb data, Italian 10-year bond yields fell below 1% on Thursday for the first time since March.

Italian bond yields have fallen 18 basis points this week and are set for the biggest weekly decline in two months. Yields on Spanish, Portuguese and Greek 10-year debt each fell by around 10 bps.

The German Bund result is a touch lower on Friday at -0.49%.

European Union leaders on Tuesday approved a 750 billion euro recovery, which according to Italian Prime Minister Giuseppe Conte would allow his government to change Italy. Italy and Spain, the two countries worst hit by the pandemic, are also among the biggest beneficiaries of the agreement.

In addition, aggressive stimulus from the European Central Bank and signs that the eurozone economy is recovering from coronavirus attacks have boosted investor sentiment towards regional assets. The euro is trading near 21-month highs.

This background encourages what is called a carry trade, where investors borrow at low interest rates and invest in higher yield assets such as Italian debt.

“Flash” Purchasing Managers’ Index of economic activity data in July released on Friday could provide another impetus for sentiment, analysts said.

“Today’s PMI must provide further confidence to catch carry,” said Michael Leister, tariff strategist at Commerzbank. (Reporting by Dhara Ranasinghe; Editing by Catherine Evans)

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