European corporate bonds edged higher on Friday as investors focused on stocks ahead of crucial US jobs data due in coming days.
A week of successful new investment-grade supply ended disappointingly as Electricite De France met lower-than-expected demand for a seven-year benchmark bond.
The FTSE Euro Corporate Bond Index showed investment-grade corporate bonds in euros yielding an average 61.6 basis points more than similarly dated government bonds at 1550 GMT, 0.4 basis points less on the day.
"It's all equity driven - people are grasping at information to try to detect an inflection point," the trader said. "Higher beta names are slightly better but most stuff today is little changed."
Stocks edged lower across Europe, paring Thursday's gains, as security and economic worries kept sentiment fragile. The FTSE Eurotop 300 index was 0.02 percent lower around 1550 GMT at 971.21.
Telecom Italia gave a second day of investor presentations. The company said on Thursday it might hit the acquisition trail after concentrating on cutting debt in 2004.
TI's 5.375 percent 2019 euro bond was bid little changed at 149 basis points over government bonds at 1515 GMT, the trader said, giving up earlier gains.
Electricite de France (EDF), Europe's biggest power producer, saw weaker-than-expected demand for its new seven-year bond, amid speculation its yield was too low for some investors.
The energy giant sold a 500 million euro April 2011 note and a 250 million euro increase to an existing November 2006 bond.
The April 2011 bond, which pays a coupon of 3.75 percent, was priced at a premium to swaps of 27 basis points, at the wide end of an earlier indication of 25-27 basis points. Sources close to the deal said on Wednesday that the company aimed to sell between 500 million and 750 million euros of the bond.
Earlier this week, a 1.0 billion new bond from British American Tobacco Plc attracted 2.25 billion euros of orders, and a 750 million euro sale by BMW AG was more than twice oversubscribed. French retailer Pinault Printemps Redoute also had a successful sale.
British supermarket chain J Sainsbury Plc saw its 5.625 percent euro bond due July 2008 fall after a day of profit warnings and ratings downgrades.