European equities opened higher this morning and have held onto solid gains as strong Chinese data overnight has boosted sentiment, with Chinese Manufacturing PMI hitting a 13-month high. A detailed breakdown showed the recovery in China is not on as solid a footing with the Import Index and the Employment Index both below the 50-threshold.
Earlier in the session, Greece announced their debt buyback plan which is to run until 1700GMT on December 7th. Initial optimism was observed as the midpoint of the indicative price range of the debt buyback is higher than the speculated amount of EUR 0.35 per EUR 1. In reaction to the news Greek 10s spiked higher and the announcement has alleviated any concerns over low participation from both domestic and foreign investors. EUR/USD reached six-week highs and USD-index falling to month lows following the announcement. GBP/USD has also reached one-month high and the pair continues to be supported by dividend related flows said to be from a major UK bank.
European fixed income markets are also seeing relief, with the Italian 10yr government bond yield spread now below 300bps at 298bps on last check, and the Spanish counterpart fast approaching 375bps.
Looking ahead, the Eurogroup meeting is set to commence at 1400GMT with a press conference set for 2200GMT. Elsewhere, there is ISM Manufacturing Data out of the US as well as Total Vehicle sales.
Print 11:53, 03 Dec 2012 - Market Analysis - Source: RANsquawk
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