Markets in Europe: the euro-zone bonds become cheaper, British Gilts grow.

Wednesday, November 18, at the European government bond market in the first half of the trading session dominated "bearish" sentiment. Particularly active market participants were selling short-term debt obligations of governments of the euro area. As for the British short-term securities, then only they only were in demand during the trading day. The nature of the session in a very meager flow of European macroeconomic information developed under the influence of corporate news, as well as on expectations of positive data from the U.S. housing market. An important factor in stimulating purchases of shares was the third consecutive day, continuing the growth of petroleum quotations, as well as the rise in metals prices. Pending confirmation that the construction of new homes in the United States is gaining momentum, set up investors for the optimistic mood in the morning, that stimulated the purchase of shares on European stock exchanges. In addition, a catalyst for increasing stock price made appeared in the media information that the company Hershey and Ferrero are in talks about a merger proposal made by the British confectionery company Cadbury. Another cause for purchases of risky assets has been the increased ratings of several European companies. Thus, experts BofA Merrill Lynch upgraded the rating of the shares of UK-based Ladbrokes, which owns 2,300 bookmakers in Britain and Ireland, from underperform to buy, analysts and Societe Generale SA raised their recommendation from hold to buy on shares of the largest manufacturer of liquors Diageo Plc. Thus, the increased interest in risky assets effectively reduced to zero demand for debt securities of European governments. Not contributed to the growth of interest in the protective instruments and not entirely positive macroeconomic statistics of the euro zone - on sale at the bond market continued throughout the first half of the trading day. With regard to published statistics, the European Statistical Office in Luxembourg reported that the balance of payments euro-zone (Current Account) in September rose from 3.5 billion to 5 billion euros. In addition, the agency Eurostat provided information about that activity in the construction sector in the euro area has decreased significantly. Thus, the volume of production in the construction sector in the eurozone economy fell in September by 1,1% compared to August (when the rate increase was 0,1%) and decreased by 8% in annual terms. Meanwhile, U.S. data disappoint investors. Construction of new homes dropped instead of the expected growth and inflation is somewhat ahead of forecasts. However, no significant changes in the nature of trades publication of macroeconomic statistics for the United States is not made. Quotes eurozone bonds continued to decline, as demand for British Gilts remained high until the last minutes of the session. As a result of the closure of bidding leading European benchmark government bonds showed the following results: yield of 2-year Bunds in Germany jumped by 13 bp and 10-year-olds - almost unchanged. Spread between 2-year and 10-year Bunds in Germany has narrowed from 210 to 197 bp