Notes/Observations
Shanghai Composite surges higher almost 3% on speculation of urbanization plans by new govt coupled with banking sector investment for China insurers
Australia Q3 GDP growth hits 3-quarter low and slightly below estimates with its +0.5% reading
BoJ Dep Gov: Reiterates will continue with powerful easing
China HSBC PMI Services hits 3-month low of 52.1
Eurozone's economic slump was a little less pronounced with PMI Services data but France, Spain and Italy were the biggest drags
Eurozone Retail Sales come in far below expectations with back month lower revisions
Spain auction results fails to impress markets; 10-year yield rise over 5bps in the aftermath
Economic Data
(IE) Ireland Nov NCB Services PMI: 56.1 v 56.1 prior
(FI) Finland Q3 GDP Q/Q: -0.1% v +0.3%e; Y/Y: -1.2% v -0.8%e
(SE) Sweden Nov PMI Services: 46.4 v 50.2 prior
(CZ) Czech Oct Retail Sales Y/Y: 2.2% v 2.5%e
(ES) Spain Oct Industrial Output WDA Y/Y: -3.3% v -6.4%e; Industrial Output NSA Y/Y: +0.6% v -12.1% prior
(EU) ECB: €1.7B borrowed in overnight loan facility €1.7B prior; €234.8B parked in deposit facility vs. €239.4B prior
(ES) Spain Nov Services PMI: 42.4 v 41.0e (highest since Aug)
(TW) Taiwan Nov Foreign Exchange Reserves: $401.0B v $399.2B prior
(SE) Sweden Oct Service Production M/M: -1.1% v -0.5%e; Y/Y: -2.0% v -0.1%e
(IT) Italy Nov PMI Services: 44.6 v 46.0e (18th straight month of contraction)
(FR) France Nov Final PMI Services: 45.8 v 46.1e (3-month high)
(DE) Germany Nov Final PMI Services: 49.7 v 48.0e (7th straight contraction)
(EU) Eurozone Nov Final PMI Services: 46.7 v 45.7e; PMI Composite: 46.5 v 45.8e
(IC) Iceland Nov Preliminary Trade Balance (ISK): 12.3B v 15.2B prior
(NO) Norway Q3 Current Account (NOK): 96B v 90B prior
(UK) Nov PMI Services: 50.2 v 51.0e (2-year low)
(EU) Eurozone Oct Retail Sales M/M: % v -0.8%e; Y/Y: % v -0.2%e
Fixed Income
(IN) India sold total INR100B vs. INR100B indicated in 3-month and 6-month Bills
(ES) Spain Debt Agency (Tesoro) sold total €4.25B vs.€3.5-4.5B indicated range in 2015, 2019 and 2022 bonds
Sold €2.124B in 3.75% Oct 2015 Bono Bond; Avg Yield 3.417% v 3.617% prior; Bid-to-cover: 1.99x v 2.09x prior; Maximum Yield % v 3.663% prior; Tail 8.1bps v 4.6bps prior
Sold €1.004B in 4.60% July 2019 Bono; Avg Yield 4.669% v 4.541% prior; Bid-to-cover: 2.47x v 2.0x prior; Max Yield 4.729% v 4.643% prior; Tail 6.0bps
Sold €1.123B in Jan 5.85% Jan 2022 Bono Bonds; Avg Yield 5.290% v 5.458% prior; Bid-to-cover: 2.29x v 1.88x; Max Yield 5.322% v 5.468%; Tails 3.2bps v 1.0bps prior
(EU) ECB allotted $4.1B in 7-Day USD Liquidity Tender at fixed 0.66% vs. $3.2B prior
(EU) ECB allotted $3.0B in 3-Month USD Tender at fixed 0.64% vs. $4.1B prior
(SE) Sweden sold total SEK15B in 3 and 6 month Bills
(DE) Germany sold €3.3B in 0.0% Dec 2014 Schatz; Avg Yield -0.01% v -0.02% prior; Bid-to-cover: 1.9x v 1.9x prior
Equities
Indices: FTSE 100 +0.25% at 5,884, DAX +0.20% at 7,449, CAC-40 +0.30% at 3,592, IBEX-35 +0.30% at 7,924, FTSE MIB +0.50% at 16,127, SMI flat at 6,850, S&P 500 Futures +0.30% at 1,410
European equity indices are broadly higher, but off of the best levels for the session, following the more than 2.5% gains seen in the Chinese equity markets. Today's gains have been led by the Italian FTSE MIB. Germany's DAX continues to trade below fresh 2012 highs. In terms of macro events, the European PMI services data was mixed (Germany and Spain above expectations, while Italy, France, and the UK missed expectations). GDP data out of Finland showed that the country's economy moved into a technical recession in Q3.
In terms of European banks, outperformers have included Commerzbank, Credit Agricole and Unicredit. Spanish banks have lagged, as bond yields have risen following Spain's debt auction. UK banks have also underperformed, ahead of the release of the OBR's autumn statement. Resources related shares are mostly higher, tracking the gains in Chinese equities and commodity prices.
UK movers [Tesco +3% (better than expected Q3 sales, disclosed strategic review for US unit), Stagecoach +2% (FY results); Numis -2% (FY results)]
France movers [EADS +1.8% (share buyback speculation), France Telecom +1% (CEO commentary)]
Finland movers [Nokia +6% (confirmed Lumia agreement with China Mobile)]
Spain movers [Bankia +3% (broad strength in European banks)]