• The LTRO set the stage for lower bond yields in Spain and Italy today. A bond auction in Spain was oversubscribed by almost three times, and yields are down significantly in Italy. Spain paid an average yield of just 2.07% for 2 year paper, and the Italian 10 year fell to 5.08% this morning. From the Wall Street Journal.
• Manufacturing in the euro zone improved only slightly in February, but remains below the 50 point mark that signals expansion, according to Markit’s euro zone PMI. The data concurs with widening agreement that the euro area is mired in a mild recession. From Reuters News.
• Capital spending in Japan was up 4.9% year-over-year in the latest quarter after declining 11% previously. The data supports a recovery after 3 quarters of churning through the fall out from the earthquake. Fourth quarter GDP will most likely be revised upward. From Bloomberg News.
• Chinese U.S. dollar reserves declined dramatically to 54% this summer from 65% according to Dow Jones. The data is based on the annual U.S. Treasury survey. This trend is widely expected, but if the rate would be somewhat of a surprise. From the Wall Street Journal.