Fresh evidence of strain in eurozone financial markets in the shape of negative yields on German short-term debt weighed on Wall Street on Monday, the FT reports. In a sign that traders remain keen to seek safety for their capital, Berlin was able to sell €3.9bn in six-month bonds at a yield of minus 0.0122 per cent. It is the first time that banks are in effect paying to lend money to a eurozone sovereign at a primary auction. The news comes after the European Central Bank also revealed a new record in the amount of cash lodged with it by banks overnight – €463.565bn – a further sign that financial institutions would rather pay for safety than take the risk of lending to each other. The pattern helped protect demand for French debt. Paris was able to sell €8.419bn in short and long-term debt at an auction in its latest monthly refinancing operation. On Wall Street, stock indices made modest gains after trading lower earlier in the session. Trade looks destined to remain in a holding pattern as the start of the quarterly earnings season looms. But in another sign some sectors in the US economy are picking some steam, a report showed the pace of consumer credit accelerated to its fast pace since November 2001, advancing to $20.4bn up from $6bn the month before.

This entry was posted by Cardiff Garcia on Monday, January 9th, 2012 at 21:41 and is featured in The Closer (9 Jan 2012) . Edit this entry.