The euro strengthened and stocks pared losses after a Spanish government bond sale drew increased demand and Greece took steps to consolidate its banking industry.
The euro appreciated 0.4 percent to $1.2793 at 10:17 a.m. in London, and Spanish 10-year government bond yields fell seven basis points to 4.68 percent. The MSCI World Index of 24 developed countries fell less than 0.1 percent after losing as much as 0.4 percent. Futures on the Standard & Poor’s 500 Index were little changed. Greek lenders rallied after Piraeus Bank SA offered to buy stakes in two banks.
Spain sold the full 3 billion euros ($3.84 billion) it planned to issue, attracting bids for 2.57 times the securities on offer, compared with 1.79 the last time at an April auction. China’s growth slowed in the second quarter by more than economists predicted, a report from the Beijing-based statistics office showed today.
“We are in a transition phase,” Urs Eilinger, Zurich-based chief investment officer at Infidar Investment Advisory Ltd., which manages about $3 billion. “We will have a weaker economy in the second half of the year but not a double dip. China is slowing and the U.S. will slow down too.”
The cost of protecting Spanish debt fell after the auction, with credit-default swaps on the nation dropping 4 basis points to 216, according to data provider CMA.
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