Reply #8: europe: Spanish, French Bonds Climb After Auctions; Euro Strengthens

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http://sfgate.adc.bloomberg.wallst.com/SFChronicle/Story?docId=1376-LVI0RG0D9L3501-21AEJDB2AF9FU5B49FVNBPP5EJ

Dec. 1 (Bloomberg) -- Spanish and French bonds rallied and the euro strengthened for a second day after the governments sold debt. European stocks fluctuated and U.S. index futures pared losses.

The yield on France’s 10-year note dropped as much as 27 basis points, the most since 1991, and traded 22 basis points lower at 3.17 percent at 7:25 a.m. in New York. Spain’s five- year yield tumbled 32 basis points to 5.53 percent. The euro appreciated 0.3 percent against the dollar. The Stoxx Europe 600 Index swung between gains and losses, after declining as much as 0.8 percent. Standard & Poor’s 500 futures slid 0.1 percent, following the stock gauge’s 4.3 percent surge yesterday.

French borrowing costs declined in its auction of 10-year bonds and Spain sold 3.75 billion euros ($5.1 billion) of debt, the maximum amount planned. European Central Bank President Mario Draghi said the bank’s program of buying government bonds “can only be limited,” a day after six central banks made additional funds available to ease strains from the crisis and the People’s Bank of China cut banks’ reserve requirements for the first time since 2008.

“The French and Spanish bond auctions were well received and priced,” Matthias Fankhauser, who helps oversee the equivalent of $100 billion in assets at Clariden Leu in Zurich, said in an interview. “Until now, we just had disasters on that front. Some investors feel it would be a good chance to jump into these high yields.”