European Market Update: March 2, 2012

(RU) Russia Narrow Money Supply w/e Feb 27th (RUB): 6.85T v 6.84T prior

(EU) ECB: €572M borrowed in overnight loan facility v €3.0B prior; €776.9B parked in deposit facility (fresh record high) vs. €475.2B prior

(DE) Germany Jan Retail Sales M/M: -1.6% v +0.5%e; Y/Y: 1.6% v 0.2%e

(FI) Finland Q4 GDP Q/Q: 0.1%e v 0.9% prior; Y/Y: 1.3%e v 2.7% prior

(HU) Hungary Dec Final Trade Balance: €325.0M v €352.1M prelim

(ES) Spain Feb Net Unemployment M/M: +112.3K v +80.0Ke

(ZA) South Africa Feb Naamsa Vehicle Sales Y/Y: 6.4% v 6.5%e

(NO) Norway Jan Retail Sales Volume Y/Y: 6.7% v 2.6%e

(UK) Feb PMI Construction: 54.3 v 51.3e

(EU) Euro Zone Jan PPI M/M: 0.7% v 0.5%e; Y/Y: 3.7% v 3.5%e

(IT) Italy 2011 Annual GDP: 0.4% v 0.3%e; Deficit to GDP: % v 4.0%e

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Notes/Observations

EU's Juncker: There is a plan B if the Greece debt swap fails

Fed's Williams: More stimulus needed if recovery falters

Euro Zone Leaders pave way for EU decision on Greek bailout agreement

China diversifies away from USD

Germany MoM Retail Sales disappoints

Spanish Feb Net Unemployment climbs more than expected

Equities:

FTSE 100 -0.10% at 5925, DAX flat at 6942, CAC-40 +0.20% at 3508, IBEX-35 +0.50% at 8592, FTSE MIB +0.60% at 16,926, SMI +0.10% at 6135

European shares rallied lifted by a stronger banking sector which is up following ECB's LTRO allotment this week and press reports that EU leaders may agree to provide capital faster to the €500B permanent bailout fund. EU leaders may pay the first two installment this year and complete the capitalization in 2015, which is one year ahead of the schedule. Goldman Sachs also boosted the financial sector by upgrading European banks to Overweight

Areva [CEI.FR] , as expected from yesterday's EU session, reported a €2.0B net loss due to provisions, the first loss in its history. However the company reiterated its outlook and noted that it aimed to raise at least €1.2B from asset sales in 2012-13 period. Meanwhile, the company agreed to sell both its stake in Eramet and in Canadian Millenium. Rentokil [RTO.UK] traded down after reporting its earnings and noted that its H1 performance in one of its units would continue to be disappointing.