German Equities Hit Fresh 2012 High Ahead Of ECB Rate Decision

Australia Nov Unemployment change beats expectations with +13.9k v flat consensus; Unemployment Rate at 3-month low

New Zealand Central Bank keeps key rate steady (as expected)

S&P cut Greece rating to Selective Default from CCC (4 notches) on recent developments on their bond swap plan; Concerns are mounting those investors might balk at the Greek debt buy back

Deutsche Bank data said to have hidden some $12B in "mark-to-market" paper losses during financial crisis in 2007-09; company responds that it found the report to be "wholly unfounded"

US Treasury Geithner: No prospect for a fiscal cliff agreement if tax rates do not rise on the top 2%; Still hopeful that a deal will be made; prepared if a deal is not reached and we go over fiscal cliff

UK Trade deficit widen in Oct

ECB and BoE expected to stay on hold

European stocks extend 18-month highs

Hungary 12-month Bill auction issuance amount was the highest on record that maturity

Economic Data
(FR) France Q3 ILO Unemployment Rate: 10.3% v 10.5%e; Mainland Unemployment Rate: 9.9% v 10.0%e; Mainland Unemployment Change: 29K v 52K prior

(CH) Swiss Nov Unemployment Rate: 3.1% v 3.1%e; Unemployment Rate Seasonally Adj: % v 3.0%e

(UK) Nov Halifax House Prices M/M: 1.0% v 0.1%e; 3M/3M: -1.3% v -1.9%e

(ZA) South Africa Q3 Current Account (ZAR: -202.5B v -213.0Be; C/A to GDP Ratio: -6.4% v -6.7%e

(HU) Hungary Oct Preliminary Trade Balance: €657.6M v €650.0Me

(RO) Romania Q3 Preliminary GDP Q/Q: -0.5% v -0.5% prior; Y/Y: -0.6% v -0.6%prior

(IS) Israel Nov Foreign Currency Balance: $75.7B v $75.9B prior

(EU) ECB: €665M borrowed in overnight loan facility €1.7B prior; €229.3B parked in deposit facility vs. €234.8B prior

(CH) Swiss Nov CPI M/M: -0.3% v 0.0%e; Y/Y: -0.4% v -0.1%e

(CH) Swiss Nov CPI EU Harmonized M/M: -0.5% v +0.1% prior; Y/Y: -0.1% v +0.1% prior

(NL) Netherlands Nov CPI M/M:-0.4% v -0.2%e; Y/Y: 2.8% v 3.0%e

(NL) Netherlands Nov CPI EU Harmonized M/M: -0.5% v +0.8% prior; Y/Y: 3.2% v 3.3% prior

(UK) Nov New Car Registrations Y/Y: 11.1% v 12.1% prior

UN Food and Agricultural Organization (FAO) Nov Food Price Index: 210.9 v 213.0 prior

(ZA) South Africa Nov SACCI Business Confidence: 91.7 v 92.0 prior

(UK) Oct Visible Trade Balance: -£9.5B v -£8.7Be; Total Trade Balance: -£3.6B v -£3.0Be; Trade Balance Non EU: -£4.5B v -£4.2Be prior

(EU) Eurozone Q3 Preliminary GDP Q/Q: -0.1% v -0.1%e; Y/Y: -0.6% v -0.6%e

(EU) Eurozone Q3 Preliminary Household Consumption: 0.0% v -0.2%e; Govt Expenditure: Q/Q: -0.2% v 0.0%e; Gross Fix Capital Q/Q: -0.7% v -0.8%e

(BR) Brazil Nov FGV Inflation IGP-DI: 0.3% v 0.2%e

(GR) Greece September Unemployment Rate: 26.0% v 25.3% prior

Fixed Income
(FR) France Debt Agency (AFT) sold approx €3.98B €3.0-4.0B in 2018, 2019 and 2027 bonds (OATs)

Sold €1.375B in 4.25% Oct 2018 Oats, Avg Yield 1.01% v 1.29% prior; Bid-to-cover: 3.38x v 3.82x prior

Sold €1.695B in 3.75% Oct 2019 OAT; Avg Yield 1.27% v 2.48% prior; Bid-to-cover: 2.77x v 2.74x prior

Sold €900M in 2.75% Oct 2027 OAT; Avg Yield 2.56% v 2.85% (record low) prior; Bid-to-cover: 3.53x v 1.58x prior

(HU) Hungary Debt Agency (AKK) sold HUF75B vs. HUF50B indicated 12-Month Bills; Avg Yield 5.81% v 5.93% prior; Bid-to-cover: 3.28x v 2.56x prior

(HU) Hungary Debt Agency (AKK) sold HUF7.5B Dec 2015 Floater Bonds; Avg Price 97.6500 vs. 97.5800 prior

Equities
Indices: FTSE 100 +0.30% at 5,908, DAX +1% at 7,529, CAC-40 +0.60% at 3,611, IBEX-35 +0.70% at 7,936, FTSE MIB +0.40% at 16,015, SMI +0.70% at 6,899, S&P 500 Futures +0.10% at 1,409

European equity indices are broadly higher, as the DAX and EuroStoxx50 indices have moved to fresh 2012 highs. Banks are broadly higher led by shares of BNP, Standard Chartered and Unicredit. Additionally, broad gains have been seen in the resources sector. Looking ahead, markets are expected to focus on interest rate decisions by the ECB and BoE.

UK movers [DS Smith +2.5% (H1 results, raised dividend), Standard Chartered +2% (trading statement); Rolls Royce -2.5% (facing corruption probe)]

France movers [EADS +6% (new shareholder agreement), TF1 +4% (broker upgrade),Wendel +1.6% (investor day presentation), Renault +1.5% (planning to cut labor costs); GDF Suez -13% (guided FY13 below estimates), Pierre Vacances -1% (FY sales)]

Germany movers [Beiersdorf +2% (raised FY sales forecast), Daimler +1.5% (reduced stake in EADS)]

Spain movers [Banco Popular -4% (downgraded by S&P)]

Italy movers [Saipem -7% (CEO resigns amid probe)]