STOCK MARKET WATCH -- Monday, 1 October 2012

[Ghost Dog]

25. Spanish Bonds Gain Third Day on Bank Optimism; German Bunds Fall

Spanish government bonds rose for a third day after stress tests of the country’s banking system showed a smaller deficit than earlier estimated, spurring optimism the region’s debt crisis is being contained.

Spain’s securities pared last week’s declines after Moody’s Investors Service said the recapitalization of the nation’s banks was positive for its credit rating. Italy’s 10-year yields dropped to the lowest in a week after an industry report showed manufacturing output shrank at a slower pace in September. German bonds declined as demand for safer assets waned. The European Central Bank meets to review monetary policy this week.

“There is a sense of relief after developments last week brought some clarity about Spain,” said Marchel Alexandrovich, a senior European economist at Jefferies International Ltd. in London. “That may reduce demand for safe assets in the run-up to the ECB meeting later this week during which the central bank is likely to reiterate the message that they are ready to do all they can to support the market.” ...

/... http://www.bloomberg.com/news/2012-10-01/spanish-bonds-gain-third-day-on-bank-optimism-german-bunds-fall.html