Economic Data
(DE) Germany Sept Wholesale Price Index M/M: 1.3% v 1.1% prior; Y/Y: 4.2% v 3.1% prior
(FI) Finland Aug Industrial Production M/M: -0.8% v +0.2%e; Y/Y: -1.4% v -0.2%e
(JP) Japan Sept Preliminary Machine Tool Orders Y/Y: -3.0% v -2.7% prior
(FR) France Aug Industrial Production M/M: +1.5% v -0.3%e; Y/Y: -0.9% v -4.2%e
(FR) France Aug Manufacturing Production M/M: +1.8% v -0.7%e; Y/Y: -0.4% v -4.0%e
(DK) Denmark Sept CPI M/M: 0.2% v 0.4%e; Y/Y: 2.5% v 2.7%e
(DK) Denmark Sept CPI EU Harmonized M/M: 0.3% v 0.5%e; Y/Y: 2.5% v 2.8%e
(SE) Sweden Aug Industrial Production M/M: +0.4% v -0.9%e; Y/Y: 3.2% v +1.5%e
(SE) Sweden Aug Industrial Orders M/M: -1.4% v -0.7% prior; Y/Y: -6.5% v -5.4% prior
(PH) Philippines Aug Bank Lending Y/Y: 12.4% v 15.2% prior; Bank Lending Net of RRPs Y/Y: 14.0% v 16.0% prior
(PH) Philippines Aug M3 Money Supply Y/Y: 6.2% v 8.7% prior
(NO) Norway Sept CPI M/M: 0.9% v 0.9%e; Y/Y: 0.5% v 0.5%e
(NO) Norway Sept CPI Underlying M/M: 1.1% v 1.0e; Y/Y: 1.1% v 1.0%e
(NO) Norway Sept Producer Prices incl. Oil M/M: -1.1% v +2.3% prior; Y/Y: 1.4%
(IT) Italy Aug Industrial Production M/M: +1.7% v -0.5%e; Y/Y: -5.1% v -4.3% prior; Industrial Production wda Y/Y: -5.2% v -9.7%e
(GR) Greece Aug Industrial Production Y/Y: +2.5% v -4.9% prior
Fixed Income
(IN) India sold total INR100B vs. INR100B indicated in 3-month and 6-month Bills
(RU) Russia sold RUB34.2B vs. RUB35B indicated in 2022 OFT bonds; Yield 7.79%
(EU) ECB allotted $3.6B in 7-day USD Liquidly Tender at fixed 0.65% vs. $1.8B prior
(EU) ECB allotted $1.1B in 3-Month USD Liquidly Tender at $3.7B prior
(SE) Sweden sold total SEK14.6B in 3-month and 6-month bills
(IT) Italy Debt Agency (Tesoro) sold total €11.0B vs.€11.0B indicated in 3-month and 12-month Bills
Sold €3.0B indicated in 3-month Bills; Avg Yield: 0.765% v 0.70% prior; Bid-to-cover: 2.79x vs. 2.25x prior
Sold €8.0B indicated in 12-month Bills; Avg Yield: 1.941% v 1.692% prior (highest yield since mid-August); Bid-to-cover: 1.77x v 1.65x prior
(CH) Switzerland sells CHF329.8M in 1.25% 2037 bond; Yield 1.031%
(DE) Germany sold €3.1B in 0.50% Oct 2017 BOBL; Avg Yield 0.53% v 0.61% prior; Bid-to-cover: 2.2x v 1.4x prior
Notes/Observations
Spain might miss 2012 deficit target of 6.3% of GDP and post 6.7-6.8% deficit - Spanish press
French, Swedish and Italian Industrial production data all come in stronger than expectations; Greece reading is positive
Italy 12-month Bills Avg Yield: 1.941% v 1.692% prior and is the highest yield since mid-August
Equities
Indices: FTSE 100 -0.40% at 5,785, DAX -0.25% at 7,216, CAC-40 -0.30% at 3,372, IBEX-35 -0.60% at 7,696, FTSE MIB -0.30% at 15,452, SMI -0.30% at 6,629, S&P 500 Futures -0.10% at 1,434
Following the lower open, most European bourses have remained in negative territory, led by declines in Spain's IBEX-35.Italy's FTSE MIB is lower by over 0.50%, as the government sold bill at higher yields than what was seen in Sept (ECB announced its OMT bond buying plan on September 6). Banks are trading mixed, with UK financials outperforming, while Spanish banks have lagged.
Overall, European bourses are on track for the third straight session of losses, as the USD continues to strengthen and traders assess the impact of slowing growth on corporate results. In terms of the corporate bond markets, Portugal Telecom has announced plans to sell 5.5 year bonds (pricing guidance approx. 533bps/mid-swaps), amid the recent declines seen for Portugal's sovereign bond yields.
In London, shares of BAE [BA.UK] are slightly lower, as the firm and EADS [EAD.FR] have until 1700 UK time to make a decision on their merger proposal. Man Group [EMG.UK] has gained over 3% on renewed speculation that BlackRock could be interested in the company. UK banks have outperformed their Continental European counterparts, amid reports that the FSA plans to ease capital requirements related to lending.
UK firms which have been weighed by ex-dividend factors include Balfour Beatty [BBY.UK], Kingfisher [KGF.UK], Smith & Nephew [SN.UK], Wolseley [WOS.UK] and WPP [WPP.UK]. French pharmaceutical firm Vivalis [VLS.FR] has gained over 12%, after receiving marketing approval for its cell-based human influenza vaccine. In Belgium, shares of mobile data communications products firm Option [OPTI.BE] have lost over 18%, as the company is exploring ways to improve its cash position.
Danish audio/visual products firm Bang & Olufsen [BO.DK] is lower by over 2% on weaker than expected quarterly results. Germany automakers have traded mixed, amid reports that China's Sept vehicle sales declined. Fiat [F.IT] has declined by over 1%, as Moody's cut the company's credit rating.
FTSE 100 movers (Smith & Nephew -2.5%, Aggreko -2.2%, Fresnillo -1.7%, WPP -1.7%, Rexam -1.7%; Lloyds +3.5%, RBS +2.5%, Anglo American +1.1%)
CAC-40 movers (Publicis -2.9%, St-Gobain -1.7%, Cap Gemini -1.7%, Lafarge -1.5%, Accor -1.3%; Bouygues +2.6%, Carrefour +2.4%, Safran +2%, PPR +1.8%, France Telecom +1.8%)
DAX movers: SAP -2%, RWE -1.1%, Continental -1%; Deutsche Bank +1%, Volkswagen +1.1%, Deutsche Post +1%)
IBEX-35 movers (Abengoa -4.4%, Banco Popular -2.8%, Gamesa -1.5%, Mapfre -1.5%, Acciona -1.4%; Bankia +6%, Enagas +1.4%, Iberdrola +1.1%)
FTSE MIB movers (Fiat -2.2%, Atlantia -1.9%, Banca Monte dei Paschi, Mediaset -1%; Impreglio +4.1%, Eni +1%)
SMI movers (Adecco -1.2%)