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European Market Update

By Trade The NewsStock MarketsSep 25, 2012 07:24AM ET
www.investing.com/analysis/european-market-update-137613
European Market Update
By Trade The News   |  Sep 25, 2012 07:24AM ET
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(EU) Italian and Spanish bonds underperform amid debt sales

Economic Data
  • (DE) GERMANY OCT GFK CONSUMER CONFIDENCE SURVEY: 5.9 V 5.9E
  • (FR) FRANCE SEPT BUSINESS CONFIDENCE INDICATOR: 90 V 89E; PRODUCTION OUTLOOK INDICATOR: -52 V -44E; OWN-COMPANY PRODUCTION OUTLOOK: -6 V -7 PRIOR
  • (IT) ITALY SEPT CONSUMER CONFIDENCE: 86.2 V 86.0E
  • (SE) SWEDEN AUG PPI M/M: -0.5% V -0.2%E; Y/Y: -1.9% V -1.3%E
  • (ZA) SOUTH AFRICA JULY LEADING INDICATOR: 130.4 V 129.4 PRIOR
  • (ES) SPAIN AUG PRODUCER PRICES M/M: 1.1% V 0.8% PRIOR; Y/Y: 4.1% V 2.6% PRIOR
  • (FI) FINLAND AUG UNEMPLOYMENT RATE: 7.3% V 6.9% PRIOR
  • (CH) SWISS AUG UBS CONSUMPTION INDICATOR: 1.03 V 1.48 PRIOR
  • (DE) GERMANY JUL REAL CONSTRUCTION ORDERS Y/Y: -1.4%; YTD Y/Y: +4.4%
  • (PL) POLAND SEPT CONSUMER CONFIDENCE: -31.6 V -35.1 PRIOR
  • (PL) POLAND AUG RETAIL SALES M/M: 0.1% V 0.1%E; Y/Y: 5.8% V 5.5%E
  • (PL) POLAND AUG UNEMPLOYMENT RATE: 12.4% V 12.3%E
  • (IT) ITALY AUG HOURLY WAGES M/M: 0.1% V 0.0% PRIOR; Y/Y: 1.6% V 1.5% PRIOR
  • (UK) AUG BBA LOANS FOR HOUSE PURCHASE: 30.5K V 28.1KE
  • (HK) HONG KONG AUG TRADE BALANCE (HKD): -36.0B V -38.8BE
  • (JP) JAPAN SEPT SMALL BUSINESS CONFIDENCE: 45.1 V 44.8 PRIOR
  • (TH) THAILAND AUG CUSTOMS TRADE BALANCE: -$1.02B V -$1.8B PRIOR
Fixed Income
  • (CH) SWITZERLAND SELLS CHF747.8M IN 3-MONTH BILLS, AVG YIELD -0.221% V -0.221% PRIOR
  • (ES) SPAIN DEBT AGENCY (TESORO) SELLS TOTAL €3.98B VS. €3.0-4.0B INDICATED RANGE IN 3-MONTH AND 6-MONTH BILLS
  • (HU) Hungary Debt Agency (AKK) sells HUF45B vs. HUF45B indicated in 3-Month Bills; Avg Yield 6.63% v 6.69%; Bid-to-cover: 1.60x v 1.86x prior
  • (IT) ITALY DEBT AGENCY (TESORO) SELLS €3.94B VS. €4.0B INDICATED RANGE IN ZERO COUPON MAY 2014 CTZ; AVG YIELD: 2.532% V 3.064% PRIOR; BID-TO-COVER: 1.65X V 1.95X PRIOR
  • (IT) ITALY DEBT AGENCY (TESORO) SELLS €1.5B V €750M-1.5B INDICATED IN SEPT 2016 AND 2021 BTPEI
  • (NL) NETHERLANDS DEBT AGENCY (DSTA) SELLS €1.92B V €1.5-2.5B INDICATED IN 2.5% 2033 DSL BONDS; AVG YIELD 2.497% V 2.342% PRIOR
  • (UK) Pricing guidance for DMO's planned 2052 index linked syndicated bond 1.5--2.5bps/Gilts
  • (ZA) South Africa sells total ZAR2.1B vs. ZAR2.1B indicated in 2023, 2026 and 2048 Bonds
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Notes/Observations
  • EUR/USD trades near the low for the week, equities are mixed as traders await additional clarity related to Spain
  • Spain continues to seek details on the ECB's OMT bond buying program. Spain's Deputy PM said the government needs to know how much the ECB would spend on buying sovereign debt.
  • Spain sells three and six-month bills at higher yields and lower bid to covers.
  • Italian bonds underperform ahead of supply due later in the week. On Wed, Italy is due to sell 6-months BOT, while Tesoro is due to sell 5 and 10-year bonds on Thursday.
  • Germany's Debt Agency Chief suggests that Bund yields may begin to rise.
  • German automakers underperform the DAX, amid speculation that Daimler might lower production
Equities
Indices: FTSE 100 -0.10% at 5,834, DAX -0.40% at 7,381, CAC-40 -0.50% at 3,480, IBEX-35 -0.10% at 8,134, FTES MIB -0.60% at 15,778, SMI -0.20% at 6,584, S&P 500 Futures flat at 1,451

Following the mixed open, European equity indices are mostly lower, led by the declines in the French CAC-40 and Italian FTSE MIB. Banks are broadly lower, led by declines in Credit Agricole and Commerzbank. Additionally, resource related companies are declining, tracking the weakness seen in the Chinese equity market.

Shares of Continental [CON.DE] are lower by more than 3%, as Schaeffler placed 20.8M shares in the company. Daimler [DAI.DE] has declined by more than 1%, amid speculation that the firm may lower production. Lotto24 [L024.DE] has moved higher by over 10%, after disclosing that it received a license to run Web-based state lotteries. Shares of Suedzucker [SZU.DE] have risen by approx. 2%, as the company raised its FY forecast. In France, Areva [AREVA.FR] is higher by over 2%, as the company entered into a long-term uranium contract with EDF. In the UK, Horny [HRN.UK] is lower by more than 30%, after the company issued a profit warning. Hornby is a manufacturer of model railways and NASCAR racing sets. Shares of Standard Chartered [STAN.UK] have underperformed the FTSE 100 on reports that Temasek could be seeking to sell its £6B stake in the company. Daily Mail [DMGT.UK] has traded higher by over 1%, after releasing its trading update. Shares of Telecom Austria [TKA.AT] are lower by more than 4%, after the company lowered its 2012 dividend. In Belgium, small cap pharmaceutical company TiGenix [TIG.BE] has gained over 15%, after receiving EU approval to begin commercial production of its ChondroCelect product. Shares of Valora [VALN.CH] are higher by more than 5%, as the company agreed to acquire the Bitsch/Brekzelkoenig Group.
  • FTSE 100 movers (Weir Group +2%, Petrofac +1.7%, Diageo +1.5%, Tate & Lyle +1.3%, Associated British Foods +1.2%; Evraz -3.6%, Standarded Chartered -2.9%, International Consolidated Airlines -1.7%, GKN -1.7%, RBS -1.4%)
  • CAC-40 movers (Safran +0.90%, Cap Gemini +0.80%, Technip +0.60%, Pernod Ricard +0.60%, Legrand +0.50%; GDF -5.7%, Credit Agricole -2.7%, Renault -2.2%, Michelin -1.6%, Bouygues -1.6%)
  • DAX movers (Adidas +0.90%, Fresenius SE +0.80%, Henkel +0.80%, SAP +0.80%, Bayer +0.60%; Continental -4.2%, Daimler -2.5%, BMW -2.2%, Volkswagen -1.8%, Deutsche Bank -1.6%)
  • IBEX-35 movers (Acciona +2%, Tecnicas +1.7%, Inditex +1.4%, Endesa +1.3%, Bankinter +1.2%; Fomento -1.8%, Acerinox -1.5%, Bankia -1.2%, Enagas -1%, Banco Sabadell -0.70%)
  • FTSE MIB movers (Tenaris +2.2%, Finmeccanica +0.80%; Fiat -2.8%, Fiat Industrial -1.8%, Mediaset -1.6%, Pirelli -1.6%, Mediobanca -1%)
  • SMI movers (Julius Baer .80%, Syngenta +0.40%; Adecco -1.2%, UBS -1.1%, Holcim -1%, Credit Suisse -0.80%)
European Market Update
 

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European Market Update

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