Portugal bond auction dominates markets

European markets were today putting Portugal under the microscope as the ailing euro zone member launched its first debt auction of the year.

The country – desperately trying to avoid a bailout from the European Union and IMF – is tapping bond investors for around €1.24bn.

All eyes are on the auction which is key to nursing the battered euro zone back to health.

On a positive note Japan indicated that it may be willing to up further its investment in euro bonds, a policy which is helping to stabilize European markets.

The FTSE 100 opened slightly higher as did other European markets. Globally, equities were higher, led by emerging markets and generally boosted by hopes for a solid earnings season. HSBC and Barclays built on gains made yesterday, while mining stocks also performed well.

Asian shares rose slightly overnight on the back of gains on Wall Street and strong US earnings reports, with Tokyo’s benchmark Nikkei index up 0.15 per cent.

The health of the UK retail sector was given a boost today with supermarket chain Sainsbury’s turning in record figures over the Christmas period.

But trade balance figures dealt a blow to the UK economy. Britain’s goods trade deficit with the rest of the world unexpectedly deteriorated in November to hit a record high, driven by imports of oil and aircraft, official data showed.

Meanwhile US export and import prices will be released later while the Federal Budget this evening will dominate the agenda across the Atlantic.

The euro was trading around $1.2986 to the dollar, rising slightly after plunging to a four-month trough around $1.2871 on Monday.

Gold prices rose more than $4 to $1,384.80 an ounce, below its historical high of around $1,430 struck in December but still buoyed by high oil prices and the euro zone crisis, both of which help promote gold’s image as a safe haven.

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