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Reports Europe

European stock market, economy and companies update (February 14, 2014)

February 14, 2014, Friday, 13:52 GMT | 09:52 EST | 19:22 IST | 21:52 SGT
Contributed by Trade The News


***Notes/Observations***
- Italy PD party has voted in favor of leader Renzi's proposal that a new government should be formed; PM Letta to tender resignation to President Napolitano; Coalition member Alfano (PDL) stated that support depended on agreement over policy and nothing for granted and not sure if attempt to form a new govt would succeed
- Peru Central Bank left Reference Rate unchanged at 4.00% prior but hinting tightening cycle might be over
- China inflation data roughly in line. CPI YoY reading matched a 8-month low (2.5% vs. 2.4%e) while PPI registered its 23rd month of negative reading (-1.6% v -1.6%e)
- European Q4 GDP readings beat expectations throughout the session (in core, peripheral and emerging regions);
Summary: France, Germany, Netherlands, Hungary, Czech Republic, Poland, Euro Zone all beat estimates; Italy registers its 1st growth in 10 quarters; Greek recession continues to ease from worst levels
- India Whole Prices hit 8-month low as it continue its downward trend (5.1% v 5.6%e)


*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Equities**
Indices [Stoxx50 +0.6%, FTSE 100 +0.1% at 6,663, DAX +0.5% at 9,648, CAC-40 +0.4% at 4,329, IBEX-35 +0.6% at 10,159, FTSE MIB +1% at 20,309, SMI flat at 8,385, S&P 500 Futures flat at 1,823]

- Market Focal Points: European equity markets trade higher amid better than expected GDP data and corporate earnings, Italy outperforms ahead of expected Prime Minister change, Germany's largest steelmaker ThyssenKrupp continues trend of better than expected profits the sector, Anglo American profits above ests amid higher production and margins, Euro Zone Q4 GDP data above ests

By Sector
- Consumer Discretionary [Fraport FRA.DE +2% (broker commentary); Oriflame Cosmetics ORI.SE -5% (cautious outlook)]
- Technology [Phoenix IT PNX.UK +4% (Q4 order book rose q/q)]
- Basic Materials/Resources [ThyssenKrupp TKA.DE +2% (Q1 profits above ests), Anglo American AAL.UK +1% (FY profits above ests)]
- Industrials [Finmeccanica FMC.IT +3% (speculation related to Ansaldo unit)]
- Healthcare [Hikma Pharmaceuticals HIK.UK +4% (raised sales forecast), Carl Zeiss AFX.DE +2% (broker commentary)]
- Financials [MunichRe MUV2.DE -0.5% (broker commentary)]
- Stoxx50 sectors [Utilities +1%, Consumer Cyclical +0.6%, Industrials +0.6%, Telecom +0.5%, Technology +0.5%, Telecom +0.5%, Basic Materials +0.4%, Energy +0.4%, Financials +0.3%, Consumer Non-Cyclical +0.2%]

Speakers:
- BOE's McCafferty commented that he was unsure if UK floods would impact Q1 GDP, as construction could be impacted
- Russia Central Bank commented after its rate decision that Inflation to be close to 5.0% target by end of 2014 but main threats came from food prices and weakening of RUB currency (Ruble). It warned that it would be ready to raise interest rates if inflationary expectations rise
- Cyprus Central Bank Gov Demetriades commented that he saw significant risk to Cyprus economic outlook but would emerge from crisis with a strong foundation
- Czech Central Bank Feb Minutes noted that prevailing opinion was that risks to forecasts were balanced and was necessary to keep the CZK currency weak to fight deflationary forces.
- South Africa President Zuma: Weak ZAR currency (Rand) is not due to domestic policies but from global economic problems
- India Economic Affairs Sec Mayaram commented that its economy had withstood recent shocks and now hoped there will be a real push for growth. He expected the downward trend in inflation to continue

Currencies/Fixed Income:
- The USD was softer in the session as the vast majority of European GDP data surprised on the upside.
- The EUR/USD hovered around the 1.37 but seem to have difficulty staying above the level despite the beat in GDP data -
- GBP/USD pair firms above the 1.67 level; highest level since May 2011

Political/In the Papers:
- Italy Renzi becomes PM he could name Reichlin as Finance Minister
- (ES) Bank of Spain's Duran: Growth prospects for Spain are still pretty modest; - Spain banks face earnings pressure
-(AU) Australia Central Bank (RBA) Asst Gov Kent: Sees potential for a correction in AUD after it has been on the high side of fundamentals for the past few years; Lower AUD would balance growth and return it to trend; Difficult to judge equilibrium level of AUD, or the direction of AUD in the future.

**Looking Ahead***
All times listed for economic events are denominated in Eastern Standard Time (Add 5 hours for GMT equivalent)
- 05:30 (BR) Brazil Dec Economic Activity M/M: -1.2%e v -0.3% prior; Y/Y: 1.1%e v 1.3% prior
- 06:00 (PT) Portugal Q4 Labour Costs Y/Y: No est v -0.1% prior
- 06:00 (IE) Ireland Dec Trade Balance: No est v €2.5B prior
- 06:00 (EU) ECB announcement on 3-year LTRO repayments vs. €2.0Be
- 06:10 (UK) DMO to sell combined £3.0B in 1-month, 3-month and 6-month Bills
- 06:30 (IN) India Forex Reserves w/e Feb 9th: No est v $291.1B prior
- 06:45 (US) Daily Libor Fixing
- 07:00 (IL) Israel Jan CPI M/M: -0.3%e v +0.1% prior; Y/Y: 1.8%e v 1.8% prior
- 07:00 (IS) Iceland Jan Unemployment Rate: No est v 4.2% prior
- 07:30 (TR) Turkey Central Bank TCMB Survey of Expectations:
- 08:00 (PL) Poland Jan M3 Money Supply M/M: -0.8%e v +2.5% prior; Y/Y: 6.1%e v 6.1% prior
- 08:00 (PL) Poland Jan CPI M/M: 0.3%e v 0.1% prior; Y/Y: 0.9%e v 0.7% prior
- 08:00 (ES) Spain Debt Agency (Tesoro) to sell bonds on Thursday, Feb 20th
- 08:30 (CA) Canada Dec Manufacturing Sales M/M: 0.0%e v 1.0% prior
- 08:30 (US) Jan Import Price Index M/M: -0.1%e v 0.0% prior; Y/Y: -1.8%e v -1.3% prior
- 08:30 (US) Revisions of Producer Price Index
- 09:00 (PT) ECB's Costa (Portugal) in Parliament
- 09:00 (BE) Belgium Dec Trade Balance: No est v -€321.3M prior
- 09:15 (US) Jan Industrial Production M/M: 0.2%e v 0.3% prior; Capacity Utilization: 79.3%e v 79.2% prior; Manufacturing Production: 0.1%e v 0.4% prior
- 09:55 (US) Feb Preliminary University of Michigan Confidence: 80.2e v 81.2 prior final
- 10:00 (MX) Mexico Central Bank Monetary Policy Minutes
- 10:00 - Italy PM Letta to formally tender resignation to President Napolitano
- 11:00 (US) Fed to purchase $1.00-1.25B in Notes
- 12:00 (DE) ECB's Weidmann in Bremen
- 14:00 (AR) Argentina Jan Wholesale Price Index M/M: No est v 1.4% prior (revised from 1.5%); Y/Y: No est v 14.7% -prior
- 16:00 (CO) Colombia Dec Exports FOB: $5.0Be v $4.9B prior
- (PE) Peru Dec Economic Activity Y/Y: 5.1%e v 4.8% prior
- (PE) Peru Unemployment Rate: 6.2%e v 5.7% prior
- (CO) Colombia Central Bank Minutes


***Economic Data***
- (SG) Singapore Dec Retail Sales M/M: 2.3% v 0.7%e; Y/Y: -5.5% v -6.8%e; Retail Sales Ex Auto Y/Y: 0.3% v 0.7%e
- (IN) India Jan Wholesale Prices Y/Y: 5.1% v 5.6%e; 8-month low helped by moderating food prices
- (FR) France Q4 Preliminary GDP Q/Q: 0.3% v 0.2%e; Y/Y: 0.8% v 0.6%e
- (UK) Retailer John Lewis reports weekly LFL sales for week ending Feb 9th (y/y): 3.3% v 4.9% prior
- (RU) Russia Narrow Money Supply w/e Feb 10th (RUB): T v 7.96T prior
- (DE) Germany Q4 Preliminary GDP Q/Q: 0.4%% v 0.3%e; Y/Y: 1.3% v 1.3%e; GDP WDA: 1.4% v 1.3%e
- (FI) Finland Dec GDP Indicator WD: -1.9% v -1.6% prior
- (FI) Finland Dec Final Retail Sales Volume Y/Y: -1.9% v -1.5% prelim
- (NL) Netherlands Q4 Preliminary GDP Q/Q: 0.7% v 0.3%e; Y/Y: 0.7% v 0.1%e
- (FR) France Q4 Preliminary Non-Farm Payrolls Q/Q:+0.1% v -0.1%e; Wages Q/Q: 0.2% v 0.2%e
- (CN) Shanghai Futures Exchange (SHFE) Weekly Copper Stockpiles: 180.3K v 149.8K tons prior
- (CZ) Czech Q4 Advance GDP Q/Q: 1.6% v 0.6%e; Y/Y: +0.8% v -0.2%e
- (HU) Hungary Q4 Preliminary GDP Q/Q: 0.6% v 0.3%e; Y/Y: 2.7% v 2.5%e
- (SK) Slovakia Q4 Preliminary GDP Y/Y: 1.5% v 1.1%e
- (RO) Romania Q4 Preliminary GDP Q/Q: 1.7% v 0.5%e; Y/Y: 5.2% v 2.8%e
- (ES) Spain Jan CPI M/M: -1.3% v -1.3%e; Y/Y: 0.2% v 0.2%e
- (ES) Spain Jan CPI EU Harmonized M/M: -1.8% v -1.8%e; Y/Y: 0.3% v 0.3%e
- (ES) Spain Jan CPI Core M/M: -1.7% v -0.1% prior; Y/Y: 0.2% v 0.2%e
- (HU) Hungary Jan CPI M/M: 0.3% v 0.5%e; Y/Y: 0.0% v 0.2%e
- (FI) Finland Dec Current Account Balance: -€740M v +€330M prior
- (EU) ECB €1.1B borrowed in overnight loan facility vs. €422M prior; €26.1B parked in deposit facility vs. €23.1B prior - Daily Eurosystem Liquidity Conditions
- (NL) Netherlands Dec Trade Balance: €3.2B v €4.2B prior
- (SE) Sweden Q4 Industry Capacity: 87.8 v 87.0% prior
- (IT) Italy Q4 Preliminary GDP Q/Q: 0.1% v 0.1%e (1st growth in 10 quarters); Y/Y:-0.8% v -0.8%e
- (PL) Poland Q4 Preliminary GDP Q/Q: 0.6% v 1.1%e; Y/Y: 2.7% v 2.9%e
- (RU) Russia Central Bank (CBR) left its One-Week Auction Rate unchanged at 5.50%, as expected
- (PT) Portugal Q4 Preliminary GDP Q/Q: 0.5% v 0.1%e; Y/Y: 1.6% v 1.1%e
- (UK) Dec Construction Output M/M: 2.0% v 2.0%e; Y/Y: 6.3%% v 6.4%e
- (IT) Italy Dec General Government Debt: €2.068T v €2.104T prior
- (EU) Euro Zone Dec Trade Balance (unadj): €13.9B v €14.5Be
- (EU) Euro Zone Q4 Advance GDP Q/Q: 0.3% v 0.2%e; Y/Y: 0.5% v 0.5%e
- (GR) Greece Q4 Advance GDP Y/Y: -2.6% v -2.0%e
- (CY) Cyprus Q4 Preliminary GDP Q/Q: -1.0% v -1.1 % prior; Y/Y: -5.3% v -5.2% prior
- (GR) Greece Jan CPI Y/Y: -1.5% v -1.7% prior

Fixed Income:
(ZA) South Africa sold total ZAR800M in I/L 2025, 2038 and 2046 Bonds

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