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European Market Update : March 07, 2013

Published 03/07/2013, 08:40 AM
Updated 01/01/2017, 02:20 AM
Spanish auction results seen as solid; Markets eye key rate decisions from BOE and ECB


Fed's Beige Book reports "restrained hiring" amid modest growth.

U.K. Cameron: We Will Stick to Economic Plan.

U.K.'s Cable raises question of increasing government borrowing.

Bank of Japan leaves rates unchanged - as expected; Shirakawa era ends.

Australia Jan Trade Balance comes in as a bigger deficit than expected.

S&P revised Portugal Sovereign Outlook higher to stable from negative.

Rating agency DBRS lowers Italy sovereign rating one notch to "A low" from "A"; affirms negative outlook.

S&P cuts ratings of Spain's Valencia Region one notch to BB- from BB; placed ratings on watch negative.

Greece PM Samaras meeting with troika this week has been moved to next week; many issues remain unresolved.

France Q1 ILO Unemployment Rate hits 13-year high at 10.6%

Swiss Feb Unemployment in line with expectations and steady from month-ago levels.

Greece Dec Unemployment Rate improves to 26.4%

Spain bond auction results solid with higher bid-to-covers; lower yields and selling just above the top end of range.

France bond auction results mixed.

Economic Data

(ID) Indonesia Central Bank leaves Reference Rate unchanged at 5.75%; as expected.

(ZA) South Africa Feb Gross Reserves: $50.4B v $50.5Be; Net Reserves: $47.2B v 47.5Be

(FR) France Q4 ILO Unemployment Rate: 10.6% v 10.5%e; Mainland Unemployment Rate: 10.2% v 10.1%e; Mainland Unemployment Change: +124K v +29K prior.

(CH) Swiss Feb Unemployment Rate: 3.4% v 3.4%e; Unemployment Rate Seasonally Adj: 3.1% v 3.1%e

(FR) France Jan Trade Balance: -€ v -€4.8Be

(CH) Swiss Feb Foreign Currency Reserves (CHF): 427.0B v 427.0Be

(DK) Denmark Jan Industrial Production M/M: +7.2% v -3.8% prior; Industrial Orders M/M: % v -14.4% prior.

(HU) Hungary Jan Preliminary Industrial Production M/M: +2.9% v -2.5% prior; Y/Y: -1.4% v -1.0%

(TW) Taiwan Feb Total Trade Balance: $0.9B v $2.1Be; Total Exports Y/Y: -15.8% v -8.1%e; Total Imports Y/Y: -8.5% v -7.3%e

(HU) Hungary Feb FX Reserves: €35.9B v €34.4B prior.

(EU) ECB: €48M borrowed in overnight loan facility vs. €3.5B prior; €139.4B parked in deposit facility vs. €146.7B prior - (AT) Austria Jan Producer Price Index M/M: +0.1% v -0.4% prior; Y/Y: 0.3% v 0.3% prior

(SE) Sweden Feb Average House Prices (SEK): 2.023M v 2.197M prior.

(SE) Sweden Feb Budget Balance (SEK): +15.6B v -96.3B prior.

(NL) Netherlands Feb CPI M/M: 0.8% v 0.0% prior; Y/Y: 3.0% v 2.9%e

(NL) Netherlands Feb CPI EU Harmonized M/M: 1.0% v 0.0% prior; Y/Y: 3.2% v 3.0%e

(HK) Hong Kong Feb Foreign Currency Reserves: $304.8B v $321.0B

(NO) Norway Jan Industrial Production M/M: -4.0% v 0.0% prior; Y/Y: -7.5% v 1.2% prior.

(NO) Norway Jan Manufacturing Production M/M: 0.3% v 0.3%e; Y/Y: 2.4% v 2.9% prior.

(NO) Norway Jan Credit Indicator Growth Y/Y: 6.3% v 6.4%e

(IT) Italy Jan PPI M/M: -0.5% v -0.3% prior; Y/Y: 0.8% v 2.4% prior.

(SG) Singapore Feb Foreign Reserves: $259.2B v $258.8B prior.

(MA) Malaysia Feb Foreign Reserves: $140.3B v $140.3B prior.

(CZ) Czech Feb International Reserves: $ 45.4Bv $45.8B prior.

UN Foods and Agricultural Organization (FAO) Feb Food Price Index: 210 v 210 prior.

(RU) Russia Feb Official Reserve Assets: $526.2B v $532.2B prior.

(ZA) South Africa Feb SACCI Business Confidence: 93.0 v 94.0 prior.

(RU) Russia Gold & Forex Reserve w/e Mar 1st: $523.4B v $524.0B prior.

(MA) Malaysia Central Bank leaves Overnight Rate unchanged at 3.00%, as expected.

(GR) Greece Dec Unemployment Rate: 26.4% v 26.6% prior.

(IT) Bank of Italy Feb Balance-Sheet: ECB funding to Italian banks at €281.0B v €279.3B prior.

Fixed Income:

(ES) Spain Debt Agency (Tesoro) sold total €5.03B vs. €4.0-5.0B indicated range in 2015, 2018 and 2023 Bonds.

Sold €569M in 3.75% Oct 2015 Bono Bond; Avg Yield 2.632% v 2.713% prior; Bid-to-cover: 4.9x v 2.02x prior; Maximum Yield 2.68% v 2.770%; Tail 4.8bps v 5.7bps prior.

Sold €2.03B in Jan 4.5% 2018 Bono Bond; Avg Yield 3.572% v 4.123% prior; Bid-to-cover: 2.3x v 2.24x prior; Maximum Yield 3.612% v 4.169%; Tail 4.0bps v 4.6bps prior.

Sold €2.435B in 5.4% 2023 bonds; Avg Yield 4.917% v 5.202% prior; Bid-to-cover: 2.3x v 1.6x prior; Max Yield 4.957% v 5.222% prior; Tails 4.0bps v 2.0bps.

(FR) France Debt Agency (AFTsold total €7.48B vs. €6.5-7.5B indicated range in 2018, 2022 and 2027 Oats.

Sold €2.354B in 4.25% Oct 2018 Oats, Avg Yield 1.02% v 1.01% prior; Bid-to-cover: 2.44x v 3.38x prior.

Sells €3.495B in 2.25% Oct 2022 OAT; Avg Yield 2.10% v 2.30% prior; Bid-to-cover: 2.20x v 3.09x prior.

Sells €1.635B in 2.75% 2027 Oats; Avg Yield 2.71% v 2.85% prior; Bid-to-cover: 2.52x v 1.79x prior.

(HU) Hungary Debt Agency (AKK) sold HUF59.0B in 2016, 2018, and 2023 Bonds.



Indices: FTSE 100 +0.40% at 6,455, DAX +0.40% at 7,948, CAC-40 +0.70% at 3,798, IBEX-35 +0.80% at 8,427, FTSEMIB +0.60% at 15,995, SMI +0.20% at 7,715, S&P 500 Futures +0.20% at 1,542

Equity markets in Europe are mostly higher. Spain's IBEX-35 has outperformed, as the country sold bonds. Banks are once again mixed on today's session. Underperformers include Commerzbank, Deutsche Bank, Lloyds and SocGen. Resource related firms are broadly higher, in line with the slight rebound in copper prices. Overall traders are focusing on today's central bank meetings (ECB and BOE) and Friday's US payrolls report.

UK movers [IMI +6% (stock buyback), Aggreko +8.5% (positive on early 2013 trading); Aviva -14% (cut dividend), National Express -11% (share placement), Avocet Mining -3.5% (FY gold production -19% y/y), Inmarsat -2.5% (FY profits declined y/y), Balfour Beatty -2.5% (FY profits below ests)]

Germany movers [Continental +3.8% (net debt below target, raised dividend), Adidas +2.5% (Q4 margins rose y/y), Merck +2.5% (Q4 results above ests), Porsche +2.5% (favorable court ruling), HannoverRe +2% (Q4 profits above ests), SAP +0.50% (broker commentary); Linde -1% (FY12 sales slightly below ests), Daimler -0.70% (broker commentary)]

France movers [Carrefour +5% (FY12 profits above ests), JC Decaux -5% (cautious on Q1), SocGen -0.70% (US money transfer probe)]

Belgium movers [Delhaize -1.5% (cut dividend)]

Italy moves [Geox -5% (FY profits declined y/y)]

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