Newspaper Article

Eurobonds Ignore Slump in European Government Markets

This article was prepared by Allison Bisbey, Axel Bugge, Nicholas Elliott, Robin Schaan, Geoffrey T. Smith, Justin Pugsley, George P. Bayliss and Eric Van Zant Of the Dow Jones Capital Markets Report

1993

Overview

Among European government markets, German Bunds saw selling after the release of M3 money supply figures, which showed a larger-than-expected increase of 6.8% in the year to October. French Treasurys were slumping on a combination of disappointment over the pace of French interest-rate reductions and technical factors, while U.K. gilts softened along with other markets. However, bearish sentiment did little to damp activity in the Eurobond market. The Export Import Bank of Japan was tapping the 10-year Euromark sector with its offering of 5.875% bonds reoffered at 99.035 to yield a spread of 18 basis points over the 10-year Bund. A basis point is one hundredth of a percentage point. The bonds are rated triple-A and are guaranteed by the Japanese government. In the cash market, the 6% bonds due 2003 edged down 0.36 point at 100.98, pushing the yield up four basis points to 5.86%. In the futures markets, the December Bund contract at the London International Financial Futures and Options Exchange traded at 99.77, down 0.50 point from Friday.

• Publisher: Dow Jones & Company Inc
• Subject: Bond markets / Election results / Eurobonds / Export import banks / Futures / Government bonds / Local elections / Prices / Treasuries