European Market Update: January 20, 2012

(GR) Greece Nov Current Account: -€2.5B v -€1.5B prior

(RU) Russia Narrow Money Supply Narrow w/e Jan 16th (RUB): T v 7.15T prior

(EU) ECB: €3.0B borrowed in overnight loan facility v €3.3B prior; €420.9B parked in deposit facility vs. €395.3B prior

(DE) Germany Dec Producer Prices M/M: -0.4% v +0.1%e; Y/Y: 4.0% v 4.6%e

(JP) Japan Dec Convenience Store Sales Y/Y: 4.1% v 7.5% prior

(TH) Thailand Dec Customs Trade Balance: -$2.1B v -$1.4Be; Exports Y/Y: -2.0% v -10.0%e; Imports Y/Y: 19.1% v 5.3%e

(HU) Hungary Nov Avg Gross Wages Y/Y: 6.0% v 5.4%e

(TW) Taiwan Dec Industrial Production Y/Y: -8.2% v -6.6%e; Commercial Sales Y/Y: -0.5% v -0.8%e

(TW) Taiwan Dec Export Orders Y/Y: -0.7% v -0.5%e (First decline in 2 years)

(HK) Hong Kong Dec CPI Composite Y/Y: 5.7% v 5.6%e

(NL) Netherlands Nov Consumer Spending Y/Y: -1.2 v -1.7% prior

(IT) Italy Nov Industrial Orders M/M: +0.1% v -1.6% prior; Y/Y: -0.7% v -4.8% prior

(IT) Italy Nov Industrial Sales M/M: 0.0% v 0.1% prior; Y/Y: 0.2% v 1.1% prior

(UK) Dec Retail Sales Ex Auto Fuel M/M: 0.6% v 0.7%e; Y/Y: 1.7% v 1.7%e

(UK) Dec Retail Sales (with Auto Fuel) M/M:0.6 % v 0.6%e; Y/Y: 2.6% v 2.4%e

(ES) Spain Nov Trade Balance: -2.7B v -€3.5Be

Fixed Income

(ZA) South Africa sold total ZAR800M in I/L 2022, 2028 and 2033 Bonds

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Notes/Observations

Greece pushes to reach agreement in Private Sector Involvement (PSI)with Monday seen as the pivotal day

Today is the dealine for European bank to submit capital raising plans to EBA

Jan China manufacturing PMI 48.8 vs 48.7 in Dec (third straight month of contraction)

Taiwan Export order decline for the first time in 2 years

China begins week long lunar new year holiday

Equities:

FTSE 100 +0.10% at 5747, DAX -0.30% at 6396, IBEX 35 -0.40% at 8572, FTSE MIB -0.30% at 15,617, SMI -0.40% at 6170

European shares dipped during the session, presumably on profit taking, after a week of solid gains which culminated in a 5-month high on Thursday. US initial jobless claims fell to a 4-year low while in Europe, Greece is continuing its talks with private investors. Peripheral bond auctions were also successful despite recent sovereign downgrades.

In individual names, Vodafone [VOD.UK] rose up to 1.8% after Indian Supreme court ruled it had no jurisdiction to tax Vodafone's 2007 acquisition of Hutchison Essar on its territory. Furthermore, it directed the government to return the money with a 4% interest and pay back Vodafone's deposit of INR25B. The tax liability could have been approx.

?1.9B. On the other hand, Thyssenkrupp [TKA.GE] issued a profit warning even after refuting speculations that the company would do so during the week. Germany's largest steel maker.