spain has managed to sell the bond. we'll find out what the yield is and just how big the auction was. again, if it came in at about b help spain meet for the rest of the rear. it looks as though the 2015 bond had a bid to cover of 2.8 versus 2 at the last auction. so stronger demand there. the 2018 bond has a bid to cover ratio of 1.6. we're getting some yields through, as well, looks like the yield on the 2018 came in at about 4.769%. now, for the 2015, we saw a significant decline in yields. that one coming this 3.678 versus over 4% the last time around. and the one i've been waiting for, the 2032 bond came in with the yield of 6.366% up significantly from 4.7%. so let's get don smith back on line. he's government bond strategist on icap. what's your initial reaction to what we're seeing here? >> you have a figure from the total amount in the auction? >> waiting to see the total amount actually. so let's see. we've got at this point confirmation they sold 992 million euros worth of one, that was the 2015. a little ov

down there or italy and spain here in the periphery, 4.7%, 6%, remarkable there, level for spain even today as the country's banks are being more fully examined in light of the national examination plans. the dollar/yen pulling back about half a percent to 8167. let's get to deirdre bolton from singapore. hi, deirdre. >> hi, kelly, how are you? and it's morris, by the way. but i'm flattered that you call me bolton. in china and hong kong, it was all about, what else, the fiscal cliff. those comments from the senate majority leader harry reid overnight really sparked some jitters in this session today, so we have red across the board. the shanghai composite, it is well and truly below that 2011 level, shedding another .9 of a percent. the hang seng was feeling some of that pressure from chinese stocks and shedding .6 of a percent. it was the mainland banks that were the culprit. they didn't fare as badly if the mainland. some capital requirement rules are going to be implemented that are raising concerns about loans and the ability of these major banks to give out loans the remainder o

to give spain a pass on the back. but until the yield pushes above of 6% level, there's little reason that we might see that. the once resilient auto sector is starting to feel the chill. according to a november survey, expectations among automakers sank to negative 67. no more, auto analyst at ubs joining us now. so the auto sector, we're not used to hearing about recognize. what's going on, how significant? >> in general in europe we've had support. actually germany is the only large market that has yet to correct. france is starting to correct. it is now probably determigerma turn. the quality is weak and now we are waiting for the volume to come down. >> what impact will this have on the automakerautomakers? who is vulnerable? >> the three germans are strong in terms of balance sheets. what it means is probably lesser capital utilization in germany because of german demand and also because all the markets globally will remain fairly weak and we see more and more of the demand in china being satisfied through local

spain as seeking full bailout. going beyond 2012, next year we have lots of issues arising such as about whether regions will be available to hit their targets, whether regions will be forced to ask for more funding. but spain overall will be able to hit the fiscal targets which they set. so 2013 brings much more instability which can result in asking for precautionary bailout. how it will defend out depends on what is happening in eurozone as a whole. >> and how much of that depends on the german elections? >> well, german elections will have quite a big say in the whole picture, not only on spain, but also also on greece. p so a lot of things will become clearer after this preliminary pressure will be over. >> trouble is we have to wait until the autumn for the german elections. anyway, thanks very much for that. officials from the imf are in brussels again today. should have just moved in. they'll try to hammer a deal to reducing the greek deficit and releasing the next tranche of aid. french minister says they'

markets pushing spain into an omt. politicians want slightly cheaper funding. i can't see why market participants will do it with the threat of the ecb coming in, why would they push yields higher. >> they haven't been forced to ask, but i would think in the end it would be the market pushing spain. personally there's a good chance at some point next year, might not have to be directly related to spain, but if there's a bit more risk aversion in the market for certain times, spain has a heavy funding schedule next year, that that's the time when yields might back up again and that would really be -- >> let's say chinese growth holds up, the u.s. gets a deal on the fiscal cliff, greece gets its money, where is the market aversion coming from? >> happy days. >> we know growth will be useful, but apart from that. >> there's a few risks on the horizons. if the market gets a hint or a sniff that that will end, it will change. central bank policy will change. sooner maybe what we expect right now. we haven't seen it in the u

we are focusing on spain in the next 15 minutes. we have spain tapping the markets. they'll start pre-funding 2013. looking to raise up to 3.5 billion across three issues. the 2015, three years, five year and a nine year. that's where the yields are currently trading at the moment. spanish ten year, you can see continues to decline. 5.66%. we had been nudging 6% in the recent ten days or so. so yields have come down today. so we'll see whether opportunistic and try to raise more than the 3.5 billion if those yields suggest they can. japan's auto industry has been hit hard by flare up of tensions in tokyo and beijing. car about ports to china dropped more than 80% in october because of anti-japanese sentiments. but that's not stopping car giants from doing business in china. toyota is planning to launch 20 new models in the mainland over the next three years. at the same time, nissan will make its first electric car under its china only brand by 2015. and despite the rocky relations between japan and china, the two countries are determined to strengthen trade ties. in

european bourses, with the exception of spain, green arrows. spain down about a third of a percent. pair rirks germany here in britain, stocks trying to add as we continue the trading session this morning. take a look at the bond space where spain and italy, the rally continues. prices rising, yields falling under 5.4 and at about 4.5% respectively there. gilts and bunds seeing rotation away. yields up a bit. forex, euro is the focus once again. we're seeing 1.0 level just slipping below it. we were over earlier this morning as grag gi was talking. but we'll continue to seat kind of concerns back and forth about commentary from determine any as to whether the greek write-down is viable going forward. dollar-yen, we are seeing it up two-thirds of a percent, 8266 is the level. stocks reacting to headlines around the world. optimism helped push the stocs up for most of the week. but today, shanghai up 0.9%. big movers were the property developers. even though we've had comments from policymakers saying restrictions on the property market will remain firmly in place. but investors did n

spain at least you can look at about prts. i'm not sure if greece is in such a strong position. >> back in summer all of us were thinking that we were very close to the euro exit. so in that sense we've made progress. it looks less likely now that greece would leave the euro, but clearly the country still has a lot to do to really sustainably stay. and i think what we've seen today or yesterday is not a once for all solution. there is still that mistrust that greece really does adjustment so they haven't done the restructuring because they think, you know, we have to still push and get the country through the reforms. >> and it expects the eurozone economy to shrink by about a tenth of a percent next year. that sounds optimistic frankly. >> i don't know. what the eurozone does next year depends on two things. one is what happens in the core countries such as germany. if there is a rebound, it looks pessimist pessimistic. and the other is the crisis countries which have probability seen the peak of austerity this year. italy ha

and canada and now in the uk, france, germany, spain. and challenges, branding challenges are fascinating. when we moved to america, we thought we'll call it napis and they were like is that a napkin? so we need to localize. so it's been a challenge. >> what about on the financing side? similar challenges, cultural differences? what barriers there? >> as an australian, going to the u.s., telling our story, we've moved 10,000 miles. we want to fundamentally change the world of napis diapers. it was actually quite easy to raise money because the american investors really get fired up about people who take risks and we were taking a massive risk moving 10,000 miles from home. so that was really pleasing. what he we found now is seven years in, we have had a huge revelation to build anything really profound and great, we want to be in business 15, 30 years and we don't want to sell. we want to recap the company. so we've had these great conversations with investors to say what do you think about a 30 year view. would you like to invest in fo

yield in spain and italy falling. italy also had that bond auction helping to meet its four-year funding goals. guilts strengthening in the uk, 1.75%. germany still under 1.4. >> in the united states, october retail sales are out at 8:30 eastern. we get the october ppi. producer prices are expected to rise .2% and by .1 when you strip out food and energy. then at 10:00 a.m., september business inventories released. at 2:00 p.m., we'll get the minutes from last month's fed meeting. on the corporate front, abercrombie & fitch, staples and tyco all report results before the bell. we'll hear from limited brands, netapp, and williams-sonoma before the close. >>> some of the recent banks have come under threat, victims of cyber attacks in september that cause blackouts. an iranian group took credit for those attacks. our next guest says we should expect more of this as hackers get more sophisticated. daniel has identified a few stocks that may benefit from the rise in online security threats. hi, dan. >> hello. >> thanks fo

spain raising a little bit of have a money. they started funding for 2013 ahead of 12 and 18 month t-bill auction today. 12 month yields a little bit lower. 18 month demand not as much as expected. but nevertheless they are now raising money for next year. so that's where we stand at the moment. the question is what are investors to do. as we head into the thanksgiving week, here's what some of the experts have been telling us already. >> there's still tremendous value in terms of roll down and carry that you can get at the very short end of the italian curve. so quite a lot of liquidity in those markets. >> timing is important because the meetings suggesting that they're close reaching a deal, we'll likely move away from your position. >> steady support base in terms of consumption. and i just think if you're looking for a strong value and you didn't want to go silver or gold or platinum, then tin is good. >> ban ki-moon has called for an immediate cease fire in gaza. speaking in cairo, he also warned that any israeli ground o

yields in spain and italy are falling this morning. so a sign investors are comfortable with some degree of risk appetite. spain at 5.73% as the ecb says it has rectified the collateral issue that it was oversight i suppose. and bund nosing higher, gilts 1.28%. that's what's happening across the curve. >> both candidates promise dramatic cuts to the u.s. budget deficit. how big is the problem really? in this animation, eamon javers shows us three ways to think about it. >> you can look at the u.s. budget deficit three ways. first through the raw numbers lens. the millennium began with a surplus, but by 2003 with the bush tax cuts and wars in iraq and afghanistan, the u.s. was back in the red. add in new prescription drug benefits for seniors and look, in just bush's last year in office, we were in the hole $458 billion and then came president obama. stimulus spending helped grow the deficit to $1.4 trillion and the number has been above a trillion ever since. then there's the gdp lens, that's how much america is overspending relative t

spain also benefiting. that yield down to 5.2%. bunds creeping back up to 1.4% level. let's key in on currency. the aussie dollar despite the broader risk-on attitude a weaker. dollar-yen moving higher 82.13. and the nikkei is adding to its string of gains throughout the month. euro-dollar rebounding off yesterday's trading session to add 0.1%. let's check in on how the asia trading session went overnight and for more, deidre wong morris joins us from singapore. >> well, it was a very good session over here, as well. headline driven. but a good session on the back of that optimism for fiscal cliff talk. all except this glaring spot of red. shanghai composite finishing lower for yet another session. it keeps falling further and further. doesn't seem that there is anything that policymakers or investors can do to lift sentiment in this market. different story in the hang seng, rebounding up about 1%. so a tale of two very different markets. hang seng up nearly 20 percent year to date. if you're playing china in both markets, very, very different views. the kospi is up 1.

too importantly will request for aid this year speaking of spain, 5.87% the yield today. now below 1.6%. and the german bund also benefiting. we are seeing that at 1.3%. quick look at forex. euro dollar no surprise, down 0.2%. still to come on the program, it was a disappointing quarter for groupon. shares sliding in after hours trade after revenues disappoint. we'll have all the details when we get back. >>> any euphoria the obama administration felt could be erased about the thought of how to get agenda through a divided congress. top of the agenda is the fiscal cliff. we have more coverage of this on cnbc.com. at the same time, china is awaiting their new government and expressing their envy of the u.s. process. we also have full coverage of that transition, as well. and also getting lots of attention, iranian warplanes fired at an unmanned drone. a formal warning was sent through diplomatic channels and if the drone was hit, it could have forced retaliation from the u.s. so no shortage of pressing foreign policy challenges on the agenda and we want to know which of th

spain spain, buying a bit of ten year paper. italy, we still continue to see a bit of buying and the ten year in the uk yielding right now just above 1.7%. the forex markets relatively stable trade seen this morning. we're still just a little bit higher in euro-dollar right now. still around that 1.27 mark. flat dollar-yen positioning. would you have seen earlier the yen weakness has helped to give the nikkei a bit of a bounce. aussie dollar relatively flat. also sterling against the greenback. # let's check in on our markets in asia. give us a round up of the asia markets can. >> most finished in the green. the big winner is japan. the nikkei 225 closed at a two month high on hopes that the country's key opposition party will win next month's election. the yen hit a seven month low versus the dollar. elsewhere lack of policy catalyst weighed on chinese stocks. the shanghai composite testif the lowest intra day level before rebounding to close a touch higher. property stocks were the big losers, but brokerage helped by supportiv

italy and spain in about the 86 region. quick look at forex. the dollar-yen back up over 81.this as japan is potentially bracing for major plig change. noda doesn't want to hurt the central bank's independence, there is clear scope for the boj and central government to be working more closely together. commodities as we continue to follow the story out of gaza, we'll have more on that coming up in just a little bit, but nymex and brent crude importantly are now both lower, just slightly lower on brent even. and it should give and you sense of just how weak the dynamics are. president obama will begin budget talks with top you lawmakers today in hopes of reaching a deal to avoid the increase. 's meet with harry reid, mitch mcconnell, john boehner and nancy pelosi at 10:15 a.m. eastern. speaking on on cnbc thursday, the co-chairs of president obama's deficit commission alan simpson and erskine bowles say you law make are haven't been focused on what's really right for the country. >> leaders who think it would be to their advantage to go off a fi

i think we will be attracted to spain and italy and portugal at some point, but i think there will be a better entry point than the form of a crisis and i think you'll see yields spike much higher. but they will make good investments and there won't be defaults in those countries actually. i think you'll see spain, italy managing and probably even portugal assuming you get a road map with common goals and not just posturing of different agendas. i think there's so much value in the euro and it's a political belief that i think everybody does share in the union. >> patrick, thanks very much indeed for joining us. plenty more to come. we have inflation numbers for october. >> that's right. food prices may have edged up last month here. we'll find out what happens and then we'll bring you those numbers just as they cross right when we come back. >>> a fight erupts between the imf and euro group chief. the two disagreeing over fiscal targets. but we're told ministers will find a solution. >>> looking to sell short term bills in an effort to refinance 5 billion euros of debt by the end of

but we're lower in spain. in italy, 4.9. really important that they're going to get bailout money. maybe there's a few that will go through. ten-year treasury yields, 1.69% is where we stand. we did get down to 1.67. so as we saw initially, we saw s&p futures down, bond yields lower, those futures have gone higher. quick lock at commodities for you. and broadly speaking, the u.s. dollar index at the moment is a little bit lower. nymex slightly lower. gold slightly higher. dollar pretty much weaker across the board. euro/dollar getting up to around two-week highs at the moment. dollar steady against the yen. the aussie dollar has found commodity currencies doing better. sterling slightly firmer against the dollar as well. again, it's that qe trade which is just keeping the dollar a little bit weaker. let's recap how asia has reacted to the election results. li sixuan has joined us from singapore. >> despite the political excitement, it's been a very subdued session, but commodities plays value and hope it will ease during obama's second term. the nikkei finished flat. analysts say o

we have just seen yields in spain nudging up this morning. 5.73%. treasury yields are lower. dollar index up near a two month high. euro-dollar 1.2794. that's down there at a two month low for the euro against the yen. aussie dollar pretty steady. sterling-dollar just below 1.6, yet we have services pmi coming out in under 20 minutes. we thought we might get additional qe from the bank of england later this week, maybe we won't, but that number will be key, as well. so that's where we stand in in european session. what's happening in asia today? >> there was lackluster trade kicking off the week. the shanghai composite closed down 0.1%. gold members led the losses but coal miners surged on hopes of rising demand. the hang seng eased half a% dragged lower by commodity major, but fox con international surged over 30% after citigroup's upgrade for short covering. prudential's hong kong shares were suspended after a trade of $590 million. in the nikkei, lost half a percent. technology shares lost ground with sharp and panasonic tumbling 7% and 6% respectively. but automakers gain

greece, portugal, spain, and italy. other countries are trying to step up to compete. jeff is exploring that theme this week and he joins us today from warsaw. jeffrey? >> reporter: yeah, ross, it's interesting, isn't it? a very simplistic bit of analysis, but as the crisis kicked off in europe, a lot of people were saying hang on, germany is a beneficiary of the single currency. it exports aggressively into the rest of europe. wouldn't it be good if some of that trade flow turned around and that would support many of the mediterranean economies? the problem is they just don't make necessarily what germans want to buy, which is why in a way we've come to poland to have a look at how poland is evolving and integrating, not only with germany, but the rest of the 27 nations. but to point to my piece today is that actually poland is doing quite well. polish companies are doing quite well. starting to sell into germany. and i went to look at one company in particular, solaris, let's take a look. despite the eurozone crisis, solaris had a record year in 2011, assembling over