Euro Rises Fourth Day as Greek Officials Promise IMF Payment

The euro advanced for a fourth day after Greece pledged to make a payment to the International Monetary Fund this week.

The shared currency climbed versus most of its major counterparts after Greece’s Finance Minister Yanis Varoufakis reiterated that the country will make the payment of about 450 million euros ($ 494 million) due April 9. The dollar slumped as Federal Reserve Bank of New York President William C. Dudley said the pace of interest-rate increases is likely to be “shallow” once the central bank starts tightening.

“We’ve had Greek headlines for three months now and I think it’s contributed to intraday volatility,” Vassili Serebriakov, a New York-based foreign-exchange strategist at BNP Paribas SA, said in a phone interview. “The most interesting question for me this session is whether the euro can hold above $ 1.10. This is a level where we’ve failed repeatedly and, in our view, it suggests an underlying demand from European investors to sell the euro.”

More from Bloomberg.com: Ventas Jumps After Announcing Ardent Buyout, REIT Spinoff

The euro advanced 0.5 percent to $ 1.1025 at 9:20 a.m. in New York, extending its longest streak of gains in 11 months.

The common currency rose 0.5 percent to 131.156 yen. The yen was little changed at 118.96 per dollar, while the Bloomberg Dollar Spot Index dropped 0.3 percent to 1,179.24.

Global Talks

Greece and euro-area authorities are in negotiations about a package of measures proposed by the government to repair its economy, a condition for the release of bailout funds.

Varoufakis met IMF Managing Director Christine Lagarde in Washington and is scheduled to meet U.S. officials on Monday. “The country will pay the IMF on April 9,” Greece’s Alternate Finance Minister Dimitris Mardas said in an interview on Mega TV on April 4.

“The market’s pretty much siding with the view that Greece will make that payment,” said Prashant Newnaha, a rates strategist at TD Securities Inc. in Singapore. “If they do make that payment, that’s also going to be a positive for the euro.”

More from Bloomberg.com: Rick Perry’s Plan to Kill Obama’s Iran Deal

The euro has tumbled 5.5 percent this year, the worse performer among a basket of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar has gained 4.9 percent and the yen advanced 5.7 percent in the period, the indexes show.

Net bearish positions on the euro rose to 226,560 contracts in the week to March 31, the most since the currency’s inception, according to data from the Washington-based Commodity Futures Trading Commission.

More from Bloomberg.com: Dudley: Rate Increases Will Be Data Dependent

The common currency has slumped amid unprecedented easing from the European Central Bank as the U.S. moves toward raising borrowing costs for the first time since 2006.

The timing of interest-rate increases is still uncertain and will depend on data, New York Fed President Dudley said in a speech Monday in Newark, New Jersey. Jobs data trailed forecasts on April 3, casting doubt on the strength of the U.S. recovery.

“It will be important to monitor developments to determine whether the softness in the March labor market report evident on Friday foreshadows a more substantial slowing in the labor market than I currently anticipate,” he said.

More from Bloomberg.com

  • Tesla Shares Are Surging After Strong Sales and Bullish Comments From Analysts
  • Dudley: Pace of Fed Rate Hikes Likely to Be ‘Shallow’
  • China’s Dickensian Boarding Schools

Dollar Weakens Further Against Rivals On Rate-hike Bets

The dollar traded lower against its rivals Monday after recording its largest weekly percentage decline against the euro since October 2011.

The euro traded at $ 1.0883, compared with $ 1.0821 Friday evening.

Several analysts, including Kit Juckes, said that traders are trimming bets that the dollar will strengthen against its rivals, driving further weakness in the buck as traders expect the Federal Reserve to raise interest rates later, and more gradually, than previously thought.

“I’m sure we’ll see positioning data over the next couple of weeks that will take the long-dollar position down by a significant hunk,” Juckes said.

According to data from the Commodity Futures Trading Commission, released on Friday, dollar-long positions declined to $ 40.5 billion in the week ended Tuesday, down from $ 44.7 billion the previous week. In November, net dollar-long positions hit $ 49.4 billion, its highest level since 2008.

A consumer-price index reading for February, expected Tuesday, and first-quarter gross domestic product data, due Friday, are likely to trigger volatility in the dollar in the coming days, said Jameel Ahmad, chief market analyst at FXTM.

“Unless the U.S. data is really bad, I think the euro-dollar is still firmly bearish,” Ahmad said. The ongoing standoff between German and Greek officials over the next installment of Greece’s bailout remains a risk, Ahmad added.

Traders will be awaiting news out of a meeting between German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras, scheduled for Monday. They will also be watching a speech by Federal Reserve Vice Chairman Stanley Fischer, set to begin 12:30 p.m. Eastern.

U.S. stocks started the session higher, with the S&P 500 up 0.18%, or 4 points to 2,111.6. The yield on the 10-year note weakened 1.4 basis points to 1.918%.

The dollar (USDJPY) traded at 119.71 yen, its lowest level against the Japanese currency in nearly a month. It traded at 120.04 Friday.

The ICE U.S. Dollar Index (DXY), a measure of the buck’s strength against a basket of six rival currencies, was down 0.76% to 97.1540.

The pound

The currency of the U.K. traded flat against the dollar Monday, but Juckes said it appears vulnerable, as the polls for May’s Parliamentary elections suggest the Scottish National Party could make huge gains in representation.

“A weak government, an expensive (vs the Euro) currency [and] outsize current account and budget deficits still make for longer-term concerns,” Juckes said in a research note.

The pound (GBPUSD) traded flat at $ 1.4933, compared with $ 1.4953 Friday. Meanwhile, one euro traded at 73.16 pence, compared with 72.36 pence Friday.

Euro up after Greece agreement, Shanghai surges again

The euro pushed higher Friday after Greece’s promise to provide new plans to reform its bailout, while Shanghai stocks continued their latest rally towards a seven-year high.

Traders moved into the single currency after Greece’s deal with its key European partners, who agreed to finish work “as fast as possible” on completing its EU-IMF rescue programme.

But while the dollar’s rally against the euro and yen fizzled out, analysts said they expect the currency to resume its advance as the US Federal Reserve prepares for a rate hike while the Japanese and European central banks print more cash.

In equities trade, Tokyo swung from initial losses to end 0.43 percent higher, adding 83.66 points to 19,560.22, while Sydney added 0.40 percent, or 24.7 points, to close at 5,975.5.

Seoul was flat by the close, edging down 0.65 points to 2,037.24, and Hong Kong lost 0.38 percent, or 93.65 points to 24,375.24.

Shanghai rallied 0.98 percent, or 35.05 points, to 3,617.32. The market has climbed more than nine percent following an eight-session winning streak and is now at its highest level since mid 2008.

Investors welcomed news that Greek Prime Minister Alexis Tsipras had agreed to hand over a fresh package of reforms to its paymasters as his anti-austerity government tries to overhaul the terms of its bailout.

The left-wing Greek leader made the announcement after emergency talks with German Chancellor Angela Merkel, French President Francois Hollande and the European Union’s top officials on the sidelines of a European summit in Brussels. He said the bailout was “back on track”.

While the crisis is not yet over, the news will come as a relief to markets as an ongoing standoff over Athens’ bailout has raised fears it will crash out of the eurozone.

In afternoon Asian trade, the euro bought $ 1.0680 and 129.02 yen against $ 1.0660 and 128.77 yen in New York Thursday.

The dollar was at 120.73 yen, compared with 120.80 yen in US trade.

– Oil prices push lower –

The greenback has been on a rollercoaster ride this week after sinking in reaction to the Federal Reserve’s lowered expectations for interest rates and economic growth.

That cooled talk of a rate rise in early summer, sending the dollar tumbling and stocks rising. At one point in New York Wednesday, after the announcement, it fell to 119.57 yen while the euro was at $ 1.1010.

The US currency has since recovered, notching up gains over the past two days.

On Thursday the Dow eased 0.65 percent and the S&P 500 shed 0.49 percent, but the Nasdaq added 0.19 percent.

“We’re seeing a bit of profit-taking here,” Hartmut Issel, the Singapore-based head of equity, credit and macro for the Asia-Pacific chief investment office at UBS Wealth Management, told Bloomberg TV.

“I wouldn’t recommend to lose sight of the bigger picture. Yes, the Fed is currently a bit more dovish than we thought going into the meeting, but we are still talking about a very strong US economy, with a strong labour market.”

Oil prices fell further owing to lingering concerns about a global supply glut. US benchmark West Texas Intermediate for April delivery fell 47 cents to $ 43.49 and Brent crude for May slipped 23 cents to $ 54.20 in afternoon trade.

Gold fetched $ 1,172.01 against $ 1,164.38 late Thursday.

In other markets:

— Mumbai fell 0.73 percent, or 208.59 points, to end at 28,261.08.

National Thermal Power Corporation fell 6.25 percent to 145.50 rupees, while IT major Wipro rose 2.92 percent to 651.85 rupees.

–Bangkok closed down 0.14 percent, or 2.17 points, to 1,529.96.

Oil company PTT dropped 1.53 percent to 322.00 baht, while Bank of Ayudhya fell 4.15 percent to 46.25 baht.

— Taipei rose 0.13 percent, or 12.96 points, to 9,749,69.

— Wellington rose 0.20 percent, or 11.97 points, to 5,871.38.

Air New Zealand was up 1.06 percent at NZ$ 2.85 while market heavyweight Fletcher Building was unchanged at NZ$ 8.93.

— Manila ended flat, inching up 3.83 points to 7,818.38.

Universal Robina added 2.23 percent to 220.00 pesos, San Miguel Corp. fell 3.34 percent to 67.95 pesos and Philippine Long Distance Telephone dropped 1.40 percent to 2,810.00 pesos.

— Jakarta closed flat, dipping 0.75 points to 5,453.10.

Cigarette maker Gudang Garam lost one percent to 51,950 rupiah, while palm oil producer Astra Agro Lestari rose 0.49 percent to 25,750 rupiah.

— Kuala Lumpur closed down 0.30 percent, or 5.48 points, at 1,803.65.

Public Bank dropped 0.21 percent to 18.60 ringgit, Sime Darby lost 0.43 percent to 9.26 ringgit, while Tenaga Nasional gained 0.14 percent to 14.60 ringgit.

— Singapore rose 0.78 percent, or 26.28 points, to 3,412.44.

DBS Bank gained 0.50 percent to Sg$ 20.06 while real estate developer Capitaland was up 1.15 percent to Sg$ 3.52.

FOREX-Euro steady after rebounding from 12-yr lows, Fed in focus

* Euro holds steady after bouncing from 12-year lows overnight

* BOJ stands pat on policy as expected, market reaction limited

* RBA leaves rate cut on table, Aussie dips

* Dollar’s dip on soft U.S. data gives euro breather (Adds details, quotes)

By Shinichi Saoshiro

TOKYO, March 17 (Reuters) – The euro held firm on Tuesday after soft U.S. data and nerves ahead of this week’s Federal Reserve policy meeting braked the dollar’s rally and helped the common currency pull out from 12-year lows.

The euro was steady at $ 1.0568, having rebounded overnight from $ 1.0457, its lowest since 2003.

The euro has been under pressure since the European Central Bank activated its 1 trillion euro bond-buying quantitative easing scheme last week and drove euro zone bond yields to record lows.

It got some relief after Monday’s weaker-than-expected U.S. manufacturing, industrial output and housing data pushed down U.S. debt yields and cooled the dollar’s advance.

Traders see the market getting little nervous ahead of the Fed’s policy-setting meeting on Tuesday and Wednesday.

Expectations have been rising that the Fed will drop the word “patient” from its statement on the timing of interest rate increases – which has fanned expectations for tightening as early as June and helped prompt the dollar’s recent surge.

But some traders have also cautioned that the dollar’s strength and its potential negative impact on the economy might be mentioned by the Fed.

“The focal point for the Federal Open Market Committee meeting still remains whether ‘patient’ will be dropped or not, and another word might be used as a replacement,” said Junichi Ishikawa, market analyst at IG Securities in Tokyo.

“But the dollar’s recent strength, which is very much a political factor as well, may also get a mention and hurt dollar longs. It is a factor that participants will be keeping at the back of their minds,” he said.

Participants will also keep an eye on how other asset markets react to the Fed’s statement and comments from its chair Janet Yellen after the meeting.

“The main point is how Treasury yields respond to the Fed. Despite the removal of ‘patience,’ prospects of a September, rather than June, rate hike may linger given the dollar’s appreciation and lower oil prices,” said a currency trader at a large Japanese bank.

“Yields are likely to start rising when ‘patience’ is removed and support the dollar, but the key is whether yields can remain elevated even if the prospect of a September hike are seen to remain intact,” he said.

The dollar inched up 0.1 percent to 121.44 yen, stuck in a relatively narrow range since advancing to an eight-year high of 122.04 on March 10.

The Bank of Japan concluded its two-day policy meeting on Tuesday, at which the central bank stood pat on monetary policy and maintained its massive stimulus. Market reaction was limited because the outcome was as expected.

The dollar index was little changed at 99.713 after pulling back from a 12-year high above 100.00 struck late last week.

The Australian dollar dipped slightly after minutes of the Reserve Bank of Australia’s showed policymakers had left the door open at their latest policy meeting for further interest rate cuts.

The RBA cut interest rates to a record low of 2.25 percent in February and stood pat this month.

The Aussie was down 0.2 percent at $ 0.7623, crawling closer to a six-year trough of $ 0.7561 plumbed last week.

(Editing by Shri Navaratnam and Eric Meijer)

FOREX-Euro firm after mild bounce from 12-yr lows, Fed in focus

* Euro holds steady after bouncing from 12-year lows overnight

* Dollar’s dip on soft U.S. data gives euro breather

* BOJ expected to stand pat on policy, maintain massive stimulus

* RBA leaves rate cut on table, Aussie dips

By Shinichi Saoshiro

TOKYO, March 17 (Reuters) – The euro stood firm on Tuesday after soft U.S. data and edginess ahead of this week’s Federal Reserve policy meeting dented the dollar’s rally and helped the common currency pull out from 12-year lows.

The euro was steady at $ 1.0570, having rebounded overnight from $ 1.0457, its lowest since 2003.

The euro has been under pressure since the European Central Bank activated its 1 trillion euro bond-buying quantitative easing scheme last week and drove euro zone bond yields to record lows.

It got some relief after Monday’s weaker-than-expected U.S. manufacturing, industrial output and housing data pushed down U.S. debt yields and cooled the dollar’s advance.

Traders see the market getting little nervous ahead of the Fed’s policy-setting meeting on Tuesday and Wednesday.

Expectations have been rising that the Fed will drop the word “patient” from its statement on the timing of interest rate increases – a key factor behind the dollar’s recent surge.

But some traders have also cautioned that the dollar’s strength and its potential negative impact on the economy might be mentioned by the Fed.

“The focal point for the Federal Open Market Committee meeting still remains whether the ‘patient’ will be dropped or not, and another word might be used as a replacement,” said Junichi Ishikawa, market analyst at IG Securities in Tokyo.

“But the dollar’s recent strength, which is very much a political factor as well, may also get a mention and hurt dollar longs. It is a factor that participants will be keeping on the back of their minds,” he said.

The dollar inched up 0.1 percent to 121.41 yen, stuck in a relatively narrow range since advancing to an eight-year high of 122.04 on March 10.

The Bank of Japan concludes its two-day policy meeting later on Tuesday, at which the central bank is expected to maintain its massive stimulus and signal its conviction that a steady economic recovery will help it achieve its price target without additional monetary easing.

The dollar index was little changed at 99.696 after pulling back from a 12-year high above 100.00 struck late last week.

The Australian dollar dipped slightly after minutes of the Reserve Bank of Australia’s latest policy meeting showed policymakers left the door open for further interest rate cuts.

The RBA cut interest rates to a record low of 2.25 percent in February and stood pat on policy this month.

The Aussie was down 0.2 percent at $ 0.7625 (Editing by Shri Navaratnam)

UK-MARKETS-GLOBAL:Asia edges up after China rate cut, euro sags
A woman in kimono walks past a stock quotation board outside a brokerage in Tokyo, in this January 4, 2010 file photo. REUTERS/Toru Hanai/Files

By Shinichi Saoshiro

TOKYO (Reuters) – Asian stocks edged higher on Monday as China’s weekend interest rate cut partially offset soft U.S. data, while the dollar hit an 11-year high against a basket of currencies.

China on Saturday stepped up its easing tempo and cut its lending and deposit rates as the world’s second largest economy tries to ward off deflation.

Australian shares posted some of the biggest gains in Asia following the China rate cut, gaining 0.6 percent after touching a seven-year peak as resource shares surged.

But the impact from the weekend easing was limited on the region’s overall markets.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose a modest 0.1 percent. Tokyo’s Nikkei crawled up 0.3 percent. The Shanghai Composite Index edged up 0.3 percent while Malaysian and Thai shares slipped.

While the previous rate cut in late November triggered a 26 percent surge in Chinese shares over the following month, investors appeared less excited this time around.

“It’s not a surprise,” said Wu Kan, head of equity trading at investment firm Shanshan Finance in Shanghai. “It’s a slow bull (market) now, not the kind of crazy bull we saw last year.”

The Aussie, a proxy of China growth-related trades, climbed to $ 0.7850 early in the session before impact from the China rate cut faded and was last trading at $ 0.7767, down 0.6 percent.

“In some senses this rate cut is a technical response to the fact that lower inflation is making real borrowing costs more expensive in China,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.

Equity markets were also cautious after revised data on Friday showed U.S. gross domestic product expanded at a slower pace in the fourth quarter than initially thought, and the University of Michigan’s final February reading on U.S. consumer sentiment slipped from an 11-year high but topped expectations.

Spreadbetters expected a mixed open for European bourses, forecasting Britain’s FTSE and France’s CAC to open a touch lower but calling for Germany’s DAX to start slightly higher.

In currencies, China’s yuan fell to its lowest level against the dollar since October 2012 after the country’s central bank cut rates. [CNY/]

The dollar was up 0.2 percent at 119.88 yen after rising to a three-week high of 119.955. It gained about 0.6 percent last week when upbeat U.S. data helped revive prospects of an early interest rate increase by the Federal Reserve.

The euro hovered near a five-week low of $ 1.1160. The greenback’s broad strength helped the dollar index rise to as high as 95.505, a peak not seen since September 2003.

In addition to the all-important U.S. non-farm payrolls data on Friday, the key focus this week will be the European Central Bank (ECB) meeting on Thursday. Investors keenly await further details on its 1 trillion euro ($ 1.1 trillion) government bond-buying programme, which begins this month.

U.S. crude fell 36 cents to $ 49.40 a barrel after Friday’s $ 1.59 surge petered out. Last month, U.S. crude posted the first monthly gain since June thanks to an improving demand outlook and supply outages. [O/R]

Three-month copper on the London Metal Exchange hovered within distance of a two-month high of $ 5,944 a tonne struck last week as China’s rate cut fed hopes of increased demand from the metal’s top user. [MET/L]

(Additional reporting by Samuel Shen and Pete Sweeney in Shanghai; Editing by Shri Navaratnam, Eric Meijer and Simon Cameron-Moore)

Reuters

Asia edges higher after China rate cut, euro slips

UK-MARKETS-GLOBAL:Asia edges up after China rate cut, euro sags
A woman in kimono walks past a stock quotation board outside a brokerage in Tokyo, in this January 4, 2010 file photo. REUTERS/Toru Hanai/Files

By Shinichi Saoshiro

TOKYO (Reuters) – Asian stocks edged higher on Monday as China’s weekend interest rate cut partially offset soft U.S. data, while the dollar hit an 11-year high against a basket of currencies.

China on Saturday stepped up its easing tempo and cut its lending and deposit rates as the world’s second largest economy tries to ward off deflation.

Australian shares posted some of the biggest gains in Asia following the China rate cut, gaining 0.6 percent after touching a seven-year peak as resource shares surged.

But the impact from the weekend easing was limited on the region’s overall markets.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose a modest 0.1 percent. Tokyo’s Nikkei crawled up 0.3 percent. The Shanghai Composite Index edged up 0.3 percent while Malaysian and Thai shares slipped.

While the previous rate cut in late November triggered a 26 percent surge in Chinese shares over the following month, investors appeared less excited this time around.

“It’s not a surprise,” said Wu Kan, head of equity trading at investment firm Shanshan Finance in Shanghai. “It’s a slow bull (market) now, not the kind of crazy bull we saw last year.”

The Aussie, a proxy of China growth-related trades, climbed to $ 0.7850 early in the session before impact from the China rate cut faded and was last trading at $ 0.7767, down 0.6 percent.

“In some senses this rate cut is a technical response to the fact that lower inflation is making real borrowing costs more expensive in China,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.

Equity markets were also cautious after revised data on Friday showed U.S. gross domestic product expanded at a slower pace in the fourth quarter than initially thought, and the University of Michigan’s final February reading on U.S. consumer sentiment slipped from an 11-year high but topped expectations.

Spreadbetters expected a mixed open for European bourses, forecasting Britain’s FTSE and France’s CAC to open a touch lower but calling for Germany’s DAX to start slightly higher.

In currencies, China’s yuan fell to its lowest level against the dollar since October 2012 after the country’s central bank cut rates. [CNY/]

The dollar was up 0.2 percent at 119.88 yen after rising to a three-week high of 119.955. It gained about 0.6 percent last week when upbeat U.S. data helped revive prospects of an early interest rate increase by the Federal Reserve.

The euro hovered near a five-week low of $ 1.1160. The greenback’s broad strength helped the dollar index rise to as high as 95.505, a peak not seen since September 2003.

In addition to the all-important U.S. non-farm payrolls data on Friday, the key focus this week will be the European Central Bank (ECB) meeting on Thursday. Investors keenly await further details on its 1 trillion euro ($ 1.1 trillion) government bond-buying programme, which begins this month.

U.S. crude fell 36 cents to $ 49.40 a barrel after Friday’s $ 1.59 surge petered out. Last month, U.S. crude posted the first monthly gain since June thanks to an improving demand outlook and supply outages. [O/R]

Three-month copper on the London Metal Exchange hovered within distance of a two-month high of $ 5,944 a tonne struck last week as China’s rate cut fed hopes of increased demand from the metal’s top user. [MET/L]

(Additional reporting by Samuel Shen and Pete Sweeney in Shanghai; Editing by Shri Navaratnam, Eric Meijer and Simon Cameron-Moore)

Reuters

Euro bond market proves irresistible for US corporates

* US borrowers in euro market hits unprecedented levels

By Philip Wright and Laura Benitez

LONDON, Feb 27 (IFR) – The euro-denominated bond market has been proving an almost irresistible port of call for high-grade US companies of late.

The number of such borrowers attracted to the sector has reached unprecedented levels, with low absolute coupons and tight spreads acting as a spur for US issuers to diversify funding avenues.

This is despite the cross-currency basis swap deteriorating steadily over the past couple of months, eroding some of the advantages on offer. At both the five-year and 10-year points of the curve, the levels have moved to around the negative 33bp area, having been in the mid-teens at the start of the year.

However, the list of market visitors has also included a number with euro commitments, so there are other factors at play.

“Despite the deteriorating swap rate, you can still save around 10bp-15bp by issuing in euros,” said a DCM syndicate banker. “But there’s not always a straightforward rationale for US companies to issue in euros. It can be for a variety of reasons. Some choose to leave it in euros for a while and leave it unswapped, so that direct comparison isn’t always important.”

The volume of debt being issued by US-domiciled investment-grade issuers has been on the march for a while now, data from Thomson Reuters show. From around 5bn in 2011, it more than doubled over each of the next couple of years – through 13.5bn in 2012 to 37bn in 2013 – and hit a high-water mark of some 62bn in 2014.

This year has already witnessed more than 23bn added to the tally. Just last week saw more than 15bn of such issuance, with the likes of Coca-Cola, AT&T and Mondelez offering multi-tranche transactions designed to appeal to a wide range of investors, and Priceline, Tyco Electronics and Moody’s adding single standalone maturities. Coca-Cola alone accounted for more than half the total – 8.5bn.

With a handful of mandates announced for imminent execution, the total for the first quarter of 2015 is already rivalling the 25bn issued in the fourth quarter of last year. By comparison, the first quarter of 2014 generated about 10bn on the way to the 62bn full-year total.

“A lot of non-European dollar funders are now thinking of euros as a funding currency,” said a banker at one of the leads on Coca-Cola’s transaction. “This is a function of spreads being tighter in Europe, yields being lower – meaning that the carry is lower – and expectations that the currency will weaken, creating a liability that will be lower in value in the future.”

CORPORATE SURGE

Something that has become noticeable is the proportion of corporate borrowers contributing to the score. February’s issuance comprised entirely such credits, a far cry from four or five years ago when there were just a paltry one or two that took the plunge.

True, January was FIG-heavy, with the likes of JP Morgan, Goldman Sachs, Citigroup and Morgan Stanley dominating proceedings. But a glance at the immediate pipeline shows names such as Kinder Morgan, Whirlpool, PPG and Flowserve, which when added to those that have already come to market makes for an impressive corporate roll-call.

And they are likely to receive a warm welcome from the European investor base, where impending QE purchases have caused spread-compression across asset classes, forcing them to look to widen the breadth of their holdings as they search out increasingly elusive returns. In addition, European accounts are generally more willing to embrace tenors that their US counterparts are not.

“The euro market has always provided greater flexibility than US dollars, especially for off-the-run maturities,” said Peter Charles, head of EMEA syndicate at Citigroup.

“As the bid for duration has increased, so have the realms of opportunities for issuers. Whereas doing 12-15 years would have been difficult previously because of limited investor capacity, the search for yield means that investors have been moving further along the curve.”

The fact that Coca-Cola stated that part of its 8.5bn proceeds would be used for the redemption of bonds maturing in March 2015 and repayment of 2017 and 2019 paper (all US dollar issues) spoke volumes about the attractive funding levels available.

But investor appetite notwithstanding, the window could be slowly shutting. Last week’s sudden influx of borrowers hinted at a rush to take advantage of conditions while they last as the low coupon rates and tight spreads are neutralised by the negative basis swap.

(Reporting By Laura Benitez and Philip Wright, editing by Matthew Davies)

CEMEX Announces Offering of Senior Secured Notes

MONTERREY, Mexico–(BUSINESS WIRE)–

CEMEX, S.A.B. de C.V. (“CEMEX”) (CX) announced today its intention to offer senior secured notes in one or more series denominated in Euros (the “Euro Notes”), subject to market and other conditions. Contemporaneous with the offering of the Euro Notes, CEMEX also intends to offer senior secured notes in one or more series denominated in U.S. Dollars (the “U.S. Dollar Notes”), subject to market and other conditions.

CEMEX intends to use the net proceeds from the offerings of the Euro Notes and the U.S. Dollar Notes to fund the redemption and/or repurchase of (i) the Floating Rate Senior Secured Notes due 2015 (the “September 2015 Floating Rate U.S. Dollar Notes”), issued by CEMEX, (ii) the 9.000% Senior Secured Notes due 2018 (the “January 2018 U.S. Dollar Notes”), issued by CEMEX, and/or (iii) the 9.250% Senior Secured Notes due 2020 (the “May 2020 U.S. Dollar Notes”), issued by CEMEX España, S.A., acting through its Luxembourg Branch, and the remainder, if any, for general corporate purposes, including the repayment of indebtedness under CEMEX’s Credit Agreement, dated as of September 29, 2014 (the “Credit Agreement”), CEMEX’s Facilities Agreement, dated as of September 17, 2012, as amended (the “Facilities Agreement”), and/or other indebtedness, all in accordance with the Credit Agreement and the Facilities Agreement.

The September 2015 Floating Rate U.S. Dollar Notes are redeemable beginning on June 30, 2015 at a redemption price of 100% of the principal amount thereof, plus accrued and unpaid interest through the redemption date; the January 2018 U.S. Dollar Notes became redeemable on January 11, 2015 and may be redeemed at a redemption price of 104.50% of the principal amount thereof, plus accrued and unpaid interest through the redemption date; and the May 2020 U.S. Dollar Notes are redeemable beginning on May 12, 2015 at a redemption price of 104.625% of the principal amount thereof, plus accrued and unpaid interest through the redemption date. Pending application of the proceeds from the offerings to redeem and/or repurchase the September 2015 Floating Rate U.S. Dollar Notes and/or the January 2018 U.S. Dollar Notes, CEMEX may use such proceeds to temporarily reduce the revolving tranche of the Credit Agreement.

The Euro Notes and the U.S. Dollar Notes would share in the collateral pledged for the benefit of the lenders under the Credit Agreement, the Facilities Agreement and other secured obligations having the benefit of such collateral, and would be guaranteed by CEMEX México, S.A. de C.V., CEMEX Concretos, S.A. de C.V., Empresas Tolteca de México, S.A. de C.V., New Sunward Holding B.V., CEMEX España, S.A., Cemex Asia B.V., CEMEX Corp., CEMEX Finance LLC, Cemex Egyptian Investments B.V., Cemex Egyptian Investments II B.V., CEMEX France Gestion (S.A.S.), Cemex Research Group AG, Cemex Shipping B.V. and CEMEX UK.

This release is neither an offer to purchase nor a solicitation of an offer to sell or buy any securities of CEMEX in any transaction.

The Euro Notes, the U.S. Dollar Notes and the guarantees thereof have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws, and they may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. The Euro Notes and the U.S. Dollar Notes will be offered only to qualified institutional buyers pursuant to Rule 144A and outside the United States pursuant to Regulation S, both as promulgated under the Securities Act.

THE EURO NOTES AND THE U.S. DOLLAR NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE NATIONAL SECURITIES REGISTRY (REGISTRO NACIONAL DE VALORES) MAINTAINED BY THE MEXICAN NATIONAL BANKING AND SECURITIES COMMISSION (COMISIÓN NACIONAL BANCARIA Y DE VALORES, OR CNBV), AND MAY NOT BE OFFERED OR SOLD PUBLICLY IN MEXICO, EXCEPT THAT THE EURO NOTES AND THE U.S. DOLLAR NOTES MAY BE OFFERED AND SOLD IN MEXICO, PURSUANT TO THE PRIVATE PLACEMENT EXEMPTION SET FORTH IN ARTICLE 8 OF THE MEXICAN SECURITIES MARKET LAW (LEY DEL MERCADO DE VALORES), TO INSTITUTIONAL AND QUALIFIED INVESTORS. UPON THE ISSUANCE OF THE EURO NOTES AND THE U.S. DOLLAR NOTES, WE WILL NOTIFY THE CNBV OF THE ISSUANCE OF THE EURO NOTES AND THE U.S. DOLLAR NOTES, INCLUDING THE PRINCIPAL CHARACTERISTICS OF THE EURO NOTES AND THE U.S. DOLLAR NOTES AND THE OFFERING OF THE EURO NOTES AND THE U.S. DOLLAR NOTES OUTSIDE MEXICO. SUCH NOTICE WILL BE DELIVERED TO THE CNBV TO COMPLY WITH A LEGAL REQUIREMENT AND FOR INFORMATION PURPOSES ONLY, AND THE DELIVERY TO AND THE RECEIPT BY THE CNBV OF SUCH NOTICE, DOES NOT CONSTITUTE OR IMPLY ANY CERTIFICATION AS TO THE INVESTMENT QUALITY OF THE EURO NOTES AND THE U.S. DOLLAR NOTES OR OF CEMEX’S SOLVENCY, LIQUIDITY OR CREDIT QUALITY OR THE ACCURACY OR COMPLETENESS OF THE INFORMATION SET FORTH IN THE DOCUMENTS USED FOR THE OFFERING. THE INFORMATION CONTAINED IN THE DOCUMENTS USED FOR THE OFFERING OF THE EURO NOTES AND THE U.S. DOLLAR NOTES IS THE EXCLUSIVE RESPONSIBILITY OF CEMEX AND HAS NOT BEEN REVIEWED OR AUTHORIZED BY THE CNBV.

This press release contains forward-looking statements and information that are necessarily subject to risks, uncertainties, and assumptions. No assurance can be given that the transactions described herein will be consummated or as to the ultimate terms of any such transactions. CEMEX assumes no obligation to update or correct the information contained in this press release.

Dollar firm after upbeat data, euro on edge ahead of Greece talks

imageTOKYO: The dollar held firm on Friday after upbeat US jobless claims data made views swing back in favour of an earlier rate hike by the Federal Reserve, while the euro stayed under pressure ahead of a crunch meeting on Greece’s bailout programme.

The dollar index stood at 94.367, having gained 0.2 percent on Thursday as traders put their focus back on the relative strength of the US economy.

Initial claims for state unemployment benefits fell 21,000, about twice as much as expected, to a seasonally adjusted 283,000, offering fresh evidence the US labour market was gathering steam.

The data helped reverse expectations of a possible delay in Fed rate hikes that arose when minutes of its last policy meeting, published on Wednesday, showed policymakers were concerned about increasing rates too soon.

“Although the dollar slipped on dovish Fed minutes, the market is coming to think that the minutes are a bit stale because they don’t reflect the strong (January) payrolls data,” said Osao Iizuka, chief currency dealer at Sumitomo Mitsui Trust Bank.

US debt yields also rose on Thursday, helping to lift the dollar, particularly against the yen, which traditionally has a strong inverse correlation with US yields.

The dollar fetched 118.89 yen, compared to Thursday’s low of 118.42 yen.

The euro traded at $ 1.1364, off Thursday’s high of $ 1.1450. It has largely stuck to a narrow $ 1.1300-1.1450 range this week, as all eyes remain on talks between Greece and the euro zone.

With Greece’s EU/IMF bailout programme due to expire on Feb. 28, Greek Prime Minister Alexis Tsipras, who won power promising to ditch the bailout, urgently needs to secure a financial lifeline to keep the country afloat beyond late March.

So far, guarded optimism is prevailing in the market, chiefly on the grounds that failure to strike a deal would be too costly for both as it could risk a Greek debt default and exit from the euro.

On Thursday, Germany rejected a Greek proposal for a six-month extension to its euro zone loan agreement, ahead of the euro zone finance ministers’ meeting on Friday.

But in a document seen by Reuters, Greece appeared to have moved substantially toward the position taken by euro zone finance ministers in negotiations on Monday that ended without a deal, as Athens vowed to ditch the 240 billion euro bailout programme.

Yields on Greek and other lower-rated euro zone bonds slid on Thursday on hopes of an agreement.

“The market appears to be relieved for now after Greece asked for a loan extension. But Greece is not promising fiscal austerity and Germany has shown scepticism,” said Masafumi Yamamoto, market strategist at Praevidentia Strategy in Tokyo.

“The market is used to seeing this by now, but if a deal isn’t reached today, the euro could face selling pressure and dollar/yen could also see the same as risk appetite will be hurt,” he said.

Copyright Reuters, 2015