Reports » Europe

European stock market, economy and companies update (September 03, 2012)

Contributed by Trade The News

*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- China Aug final PMI Manufacturing confirms contraction. Asian equity shares higher easing hopes
- Australia Retail Sales register their largest decline in two years with its first negative reading of 2012; Aussy Dollar hits 6-week lows
- Most major European PMI Manufacturing PMI come in lower than expectations; UK was the exception and exceeded expectations

***Equities***
FTSE 100 +0.4% at 5736, DAX +0.50% at 7,003, CAC-40 +0.7% at 3437, FTSE MIB -0.1% at 15,179, SMI +0.6% at 6422, S&P 500 Futures -0.41% at 1404.40

- European equity markets edged marginally higher in the session supported by a strong showing in the resource sector as weak Chinese manufacturing data overnight spurred hopes for monetary easing measures by the PBoC. There were also expectations that ECB would outline a plan for sovereign bond purchases to help lower the borrowing costs of peripheral members.

- Vodafone Group [VOD.UK] signed Multi-country partner market agreement with Zain
- Daily Mail&General [DMGT.UK] Sold 50% stake in DMG Radio Australia for £65M
- Gemfields Plc [GEM.UK] appointed Mark Summers as CFO; effective immediately
- Royal Dutch Shell [RDSA.UK] completed sale of Nigerian OML40 for $102M
- Rhoen-Klinikum [RHK.DE] Fresenius suspended its plans to renew its €3.1B offer for company but announced it would increase its stake inorder to preserve its strategic options
- E.on [EOAN.DE] signed 4.65 bcm gas deal with Rosneft for 2013-2015 period
- Remy Cointreau [RCO.FR] acquired single malt Scotch whiskey Bruichladdich; No terms disclosed
- Alstom [ALO.FR] signed a MOU for a JV with Toshiba on smart grid business
- Wolters Kluwer [WKL.NL] To acquire assets of BSI; financial terms not disclosed
- Svenska Handelsbanken [SHBA.SE] Russia annulled license of unit
- Volvo [VOLVB.SE] Exec commented that demand for buses was roughly at the same level as after Q2
- Gold Fields Limited[GFI.ZA]stated that the strike at KDC East Mine in South Africa continued with 12K employees taking part

Speakers:
- German Chancellor Merkel commented that financial markets have not served the people and need to nurture German/France relations
- German Fin Min Schaeuble reiterated the Germany view that it was more likely that ECB would supervise big banks with national authorities supervising smaller banks
- Spain Econ Min de Guindos commented that ECB's Draghi's comments on bond spreads were important and that the ECB would take appropriate action. Spain waited for ECB to detail its actions and conditions. He noted that Spain's full €100M banking sector bailout would not be used and the planned VAT increase would boost revenues
- Czech Central Bank Lizal commented that the CZK currency not expected to appreciate significantly; sees no reason for central bank to intervene in FX markets . He was not sure if law allowed negative interest rates but that the prior rate cut was effective
- SNB's Jordan reiterated his view that SNB would continue to enforce the EUR/CHF floor with determination. Rise in swiss franc would carry the risk of deflation and be a "substantial" threat to the economy. Economic uncertainty in the EU was a great concern.
- Swiss Financial Regulator (FINMA)'s Raaflaub commented that he saw challenges ahead for country's financial sector but Swiss banks are generally well capitalized
- Sweden Debt Agency head Lundren to step down on Feb 1st, 2013
- Cyprus Fin Min Shiarly commented that the EU/IMF/ECB Troika to begin discussions with Govt on Monday, Sept 17th. He stressed that there would be no delay or halts in State payments with Sept payment of €380M promptly paid
- Russia to decide on loan application
- Discussions with Russia on loan does not complicate Troika talks
- China PBoC Deputy Gov Hu stated that the EU debt crisis could not be solved by money alone

Currencies:
- The USD was consolidating during the European morning with risk appetite somewhat constrained from weaker Asian economic data. The day had seen poor manufacturing numbers from China, South Korea and Taiwan and downward revision to the Major European PMIs.
The GBP popped up some 20 pips after better PMI Manufacturing data. The GBP/USD tried to move above the 1.59 handle but faced technical headwinds.

Political/ In the Papers:
- Spain PM Rajoy noted that the Eurozone might introduce within 3 years and outlined 3-step process to issu. He reiterated view that Spain could not finance itself at current rates and needed higher taxes to restore standing
- France govt offered over €20B to bail out banking group Crdit Immobilier de France (CIF) after a search for a private buyer failed

***Looking Ahead***
***All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)
- (CZ) Czech Aug Budget Balance (CZK): No est v -51.7B prior
- (RO) Romania Aug Total International Reserves: No est v $36.6B prior
- 06:00 (IR) Ireland July Industrial Production M/M: No est v 2.7% prior; Y/Y: No est v 9.2% prior
- 06:00 (BE) Belgium Debt Agency to sell €2.2-3.2B in 2019, 2022 and 2041 OLO bonds
- To sell 3% Sept 2019 OLO Bonds
- 06:45 (EU) ECB's Fratzscher speaks at Brussels Think Tank
- 07:30 (BR) Brazil Central Bank Weekly Economists Survey
- 08:00 (RO) Romania to sell Bills
- 09:00 (BR) Brazil Aug PMI Manufacturing: No est v 48.7 prior
- 09:00 (FR) France Debt Agency (AFT) to sell between €5.5-6.8B in 3-month, 6-month and 12-month Bills
- 09:30 (EU) ECB calls for bids in 7-Day Main Refinancing Tender
- 09:30 (EU) ECB announces weekly settlements in Govt Bond Purchases (SMT)
- 09:45 (UK) BOE to buy £1.0B in 2015-2019 in reverse auction
- 10:00 (MX) Mexico Central Bank Economist Survey
- 10:00 (MX) Mexico July Remittances: $2.0Be v $2.1B prior
- 11:45 (EU) ECB chief Draghi, EU Commissioners Rehn, Juncker, Barnier debate Bank Union in Brussels
- 12:00 (DE) Germany Fin Min Schaeuble speaks on Future of Europe's Single Market, Hanover
- 13:00 (AS) ECB's Nowotny Speaks at Panel Discussion in Vienna
- 12:00 (IC) Iceland Q2 Current Account (ISK): No est v -2.3B prior
- 12:00 (IT) Italy Aug New Car Registrations Y/Y: No est v -21.4% prior
- 13:00 (MX) Mexico Aug IMEF Manufacturing Index: No est v 53.3 prior; Non Manufacturing: No est v 51.5 prior
- 13:00 (IT) Italy Aug Budget Balance: No est v €2.3B prior; Budget Balance YTD: No est v -€27.4B prior
- 14:00 (BR) Brazil Aug Trade Balance: No est v $2.9B prior; Exports: No est v $21.0B prior; Imports: No est v $18.1B prior

***Economic Data***
- (IN) India Aug Markit Manufacturing PMI: 52.8 v 52.9 prior
- (RU) Russia Manufacturing PMI: 51.0 v 52.0 prior
- (JP) Japan Aug Vehicle Sales Y/Y: 7.3% v 36.1% prior
- (IN) India July Trade Balance: -$15.5B v -$15.5B; Exports Y/Y: -14.8% v -5.5% prior; Imports Y/Y: -7.6% v -13.5% prior
- (IE) Ireland Aug NCB Manufacturing PMI: 50.9 v 53.9 prior
- (SE) Sweden Aug Swedbank PMI Survey:45.1 v 50.1e
- (AU) Australia Aug RBA Commodity Price Index Au: 90.3 v 94.4 prior; Commodity Index SDR Y/Y: -13.7% v -11.1% prior
- (HU) Hungary Aug PMI: 49.5 v 51.9 prior
- (PL) Poland Aug Manufacturing PMI: 48.3 v 49.7 prior
- (TR) Turkey Aug Manufacturing PMI: 50.0 v 49.4 prior
- (CZ) Czech Q2 Avg Real Wage Y/Y: -1.1% v 0.0%
- (TR) Turkey Aug Consumer Prices M/M: 0.6% v 0.0%e; Y/Y: 8.9% v 8.3%e; Core CPI Y/Y: 7.2% v 7.5% prior
- (TR) Turkey Aug Producer Prices M/M: +0.3% v -0.3% prior; Y/Y: 4.6% v 6.1% prior
- (TH) Thailand Aug Consumer Price Index M/M: % v 0.4%e; Y/Y: 2.7% v 2.6%e; Core CPI Y/Y: % v 1.7%e
- (EU) ECB: €590M borrowed in overnight loan facility vs. €571M prior; €346.0B parked in deposit facility vs. €330.3B prior
- (ES) Spain Aug Manufacturing PMI: 44.0 v 42.8e; Highest reading since March but the 16th straight month of contraction
- (CH) Swiss July Real Retail Sales Y/Y: 3.2% v 3.3% prior
- (CZ) Czech Aug Manufacturing PMI: 48.7 v 49.5 prior
- (CH) Swiss Aug PMI Manufacturing: 46.7 v 49.1e
- (IT) Italy Aug PMI Manufacturing: 43.6 45.0e, 10-month low
- (FR) France Aug Final PMI Manufacturing: 46.0 v 46.2e
- (DE) Germany Aug Final PMI Manufacturing: 44.7 v 45.1e
- (RU) Russia Aug Reserve Fund: $60.5B v $59.9B prior; Wellbeing Fund: $85.9B v $85.2B prior
- (GR) Greece Aug Manufacturing PMI: 42.1 v 41.9 prior
- (EU) Euro Zone Aug Final PMI Manufacturing: 45.1 v 45.3e
- (NO) Norway July Credit Indicator Growth Y/Y: 6.9% v 7.1%e
- (UK) Aug PMI Manufacturing: 49.5 v 46.1e
- (DK) Denmark Aug PMI Survey: 51.7 v 48.0 prior
- (ZA) South Africa Aug Kagiso PMI: 50.2 50.0e

Fixed Income:
- (PH) Philippines sold total PHP7.5B vs. PHP7.5B indicated in 3-month, 6-month and 12-month Bills
- (NO) Norway sold NOK3.0B vs. NOK3.0B indicated in 2% 2023 Bonds; Avg Yield 2.08% v 2.16% prior
- (NL) Netherlands Debt Agency (DSTA) sold total €2.7B vs. €4.0B in 3-month and 6-month Bills
- Sold €1.61B vs. €2.0B indicated in 3-month Bills; Yield: -0.063% v -0.043% prior; Bid-to-cover: 2.51x v 3.13x prior
- Sold €1.12B vs. €2.0B indicated in 6-month Bills; Avg Yield: -0.027% v -0.021% prior; Bid-to-cover: 2.75x v 2.59x prior