Portugal’s government auctioned 600 million euros in 2014 bonds and 681 million euros in 2023 bonds today.

Fundamental Headlines

• Euro, Pound Lose Early Gains – Wall Street Journal
• Rate Swings Sting Europe’s Borrowers – Wall Street Journal
• Risky Assets Rise as U.S> Concerns Ease – Financial Times
• European Stocks Snap Six-Day Rally, U.S. Futures Fluctuate; Copper Climbs  – Bloomberg
• King Forecasts No Early Return to “Normal” Levels for U.K. Interest Rates – Bloomberg

EUR/USD: Portugal’s government auctioned 600 million euros in 2014 bonds and 681 million euros in 2023 bonds today. The 2014 notes were issued at a yield of 3.621 percent versus 2.759 percent the previous auction, while the 2023 notes were issued at a yield of approximately 5.377 percent, compared to 4.416 percent the previous auction. In turn, Portuguese 10 year notes fell 17 basis points to 4.99 percent. Indeed, today’s annoucement comes on the back of the Portuguese government raising taxes and cutting spending in attempt to rein in on its budget deficit.  Meanwhile, Europe’s 3 month interbank lending rate rose to a yearly high of 0.896 percent from 0.893 percent previously. The data comes to no surprise as the Euro area bank lending survey “reported an increase in the net tightening of credit standards compared with the first quarter, exceeding expectations from the previous survey round,” the ECB stated today. It is also worth noting that in the second quarter of 2010, banks reported that credit lines to enterprises and credit standards to loans jumped 11 percent. Looking ahead, traders will shift their focus to the economic confidence reading due out  tomorrow, which is expected to rise to 99.1 for the month of July from 98.7 the previous month.  Additionally, Germany’s unemployment rate is forecasted to decline to 7.6 percent in July from 7.7 percent in June to mark the lowest level since November 2008. To discuss this and other reports, please visit the EUR/USD forum.

Written by Michael Wright, Currency Analyst
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Michael Wright is the author of FX Headlines, Fundamentals vs. Technical’s, Weekly Spotlight, and Forex Trading Weekly Forecast

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