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Nationwide More Creditworthy Than Uk Govt

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Just took a look at current fixed-interest Prefs/PIBS/ECNs market, to see if the latest bout of jitters has introduced good enough value to tempt me (it hasn't). Used the weekly datasheet from Collins Stewart, which is the best source I'm aware of.

What I did notice: Nationwide's floating-rate PIB CEBB, at a premium to the benchmark 2055 Treasury bond. Lower yield. Seems the market considers Nationwide's debt safer than UK debt. I think I agree!

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Euro nears 4-year low versus dollar after China report

Kaori Kaneko


Wed May 26, 2010 10:59pm EDT

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The slumping euro

Worried about the euro? Curious about the outlook for the dollar? Join Reuters markets commentator Kevin Weir for a live Q&A on Thursday at 3:00 pm ET. Live Coverage

TOKYO (Reuters) - The euro approached a four-year low against the dollar and an 8-1/2-year low against the yen on Thursday as a sell-off led by nagging worries about Europe's debt trouble showed no signs of abating.

The euro's was dragged down after the Financial Times reported on Wednesday that China is reviewing its euro zone debt holdings because of growing concerns about gaping deficits in countries including Greece and Portugal.

"The report on China raises the prospect that other emerging nations may follow suit. The impact is large as market attention on China is high at the moment," said a trader at a Japanese bank.

"The market is vulnerable to bad factors now and the euro seems to have fallen into a negative spiral," he said.

The euro inched up 0.1 percent from late U.S. trade to $1.2191. The European single currency slipped as low as $1.2154 in early Asian trade, just above a four-year low of $1.2143 hit on trading platform EBS last week.

The euro has lost more than 8 percent against the dollar so far this month and is heading for its biggest monthly fall since October 2008.

There was market talk of option barriers at $1.2100 and then at $1.2000. Also traders said good selling interest at $1.2300, suggested the euro was still vulnerable.

The euro advanced 0.2 percent to 109.65 yen after falling to hit the day's low at 109.20 yen. It struck an 8-1/2-year low of 108.83 yen on EBS earlier this week.

"As the euro fell to historical levels, some short-covering emerged but the currency is expected to try new lows," said Michiyoshi Kato, senior vice president for forex sales at Mizuho Corporate Bank.

Worries about tighter dollar funding, with costs for banks to borrow dollars in the interbank market posting fresh 10-month highs on Wednesday, are prompting investors to shift to the relative safety of the greenback and away from riskier assets and currencies, traders said.

U.S. two-year swap spreads, a key gauge of financial system stress, stood around 46 basis points, having widened to one-year highs above 60 on Tuesday.

The dollar index .DXY, a gauge of its performance against six major currencies, was at 87.194, not far from a 14-month high of 87.458 hit last week. The greenback edged up 0.1 percent to 90.06 yen.

Among higher-yielding currencies, the Australian dollar rose 0.1 percent to $0.8243 and climbed 0.5 percent to 74.18 yen.

Traders also said Japanese mutual funds or "toushin" launching on Thursday seemed to be helping dollar/yen and cross/yen on expectations of Japanese investors' funds flowing into overseas assets, traders said.

Hmmmmmmmmm China starting to get smart

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