PrefBlog

Bernanke had some cheerful commentary:

Federal Reserve Chairman Ben S. Bernanke said the economy is at risk from Europe’s debt crisis and the prospect of fiscal tightening in the U.S., while refraining from discussing steps the central bank might take to protect the expansion.
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Bernanke also warned lawmakers that “a severe tightening of fiscal policy at the beginning of next year that is built into current law — the so-called fiscal cliff — would, if allowed to occur, pose a significant threat to the recovery.”

Spain gets more interesting daily:

Spanish Prime Minister Mariano Rajoy said he’s talking to his European peers about how to shore up the country’s banks as Fitch Ratings cut Spain’s credit grade to within two steps of junk.
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Rajoy spoke minutes before Fitch downgraded Spain by three levels to BBB, within two steps of non-investment grade. Fitch said the cost to the state of shoring up banks may amount to as much as 100 billion euros ($126 billion) in the worst case, compared with its previous estimate of 30 billion euros, as Spain will remain in recession next year.
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Spain’s 10-year bond yield fell to 6.088 percent yesterday from 6.282 percent on June 6, retreating from the 7 percent threshold that triggered bailouts in Greece, Ireland and Portugal. The Treasury met its issuance goal at a bond auction, selling 2.07 billion euros of Spanish securities, surpassing the maximum target of 2 billion euros.

It was a day of solid recovery for the Canadian preferred share market, with PerpetualPremiums gaining 6bp, FixedResets up 10bp and DeemedRetractibles winning 23bp. Of great interest is the observation that the Bozo Spread (Current Yield PerpetualDiscounts less Current Yield FixedResets) has returned to negative territory. Volatility was minor.

This entry was posted on Friday, June 8th, 2012 at 1:23 am and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.