Spain, Italy and the Netherlands all sold debt of varying maturities without much of a hitch (maximum amounts were not all sold) and bonds are rallying for all in response after the last three days of selling. Spain in particular said they are about half way done with their 2012 funding needs but with both them and Italy relying more on short term borrowings, rollover risk will remain high. Notwithstanding election uncertainty and economic stagnation, French consumer confidence rose to the highest since Dec ’10 in April. In Asia, China’s leading and coincident indices rose in March but both imports and exports in Hong Kong unexpectedly fell. Likely clinching a rate cut from the RBof Australia next week, Q1 CPI there rose only 1.6% y/o/y vs expectations of a gain of 2.2%. The FOMC begins their two day get together today and all signs point to an uneventful meeting. The June one will be more interesting as it precedes the expiration of OFTYC, Operation Flatten The Yield Curve.
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