Economic Data
(JP) Japan Sept Final Machine Tool Orders Y/Y: -2.8% v -3.0% prelim
(EU) ECB: €1.92B borrowed in overnight loan facility v €1.97B prior; €257.9B parked in deposit facility vs. €251.4B prior
(TH) Thailand Central Bank cuts its Benchmark interest rate by 25bps to 2.75% (not expected)
(UK) Bank of England (BOE) Minutes: Vote was unanimous to keep both interest rates and Asset Purchase Target unchanged in Oct (as expected)
(UK) Sept Jobless Claims Change: -4.0KK v 0.0Ke (flat); Claimant Count Rate: 4.8% v 4.8%e
(UK) Aug Average Weekly Earnings 3M/Y: 1.7% v 1.6%e; Weekly Earnings ex-Bonus 3M/Y: 2.0% v 2.0%e
(UK) Aug ILO Unemployment Rate (3mths): 7.9% v 8.1%e; Employment Change 3M/3M: +212K v +200Ke
(EU) Euro Zone Aug Construction Output M/M: 0.7% v 0.1% prior; Y/Y: -5.5 v -6.2% prior
(CH) Swiss Oct Credit Suisse ZEW Expectation Survey: -28.9 v -34.9 prior
Fixed Income
(IN) India sold total INR100B vs. INR100B indicated in 3-month and 6-month Bills
(RU) Russia sold RUB19.6B in 2027 bond; Yield 7.90%
(EU) ECB allotted $2.9B in 7-day USD Liquidity Tender at fixed 0.66% vs. $3.6B prior
(SE) Sweden sold SEK3,5B vs. SEK3.5B indicated in 1.5% 2023 Bonds; Yield 1.7499% v 1.4670% prior
(DE) Germany sold €4.189B in0.0% Sept 2014 Schatz; Avg Yield +0.07% v +0.06% prior; Bid-to-cover: 2.0x v 2.1x prior
(PT) Portugal Debt Agency (IGCP) sold total €1.85B vs. €1.75-2.00B indicated range in 3-month, 6-month and 12-month Bills
Sold €250M in 3-month Bills; Avg Yield 1.366% v 2.168% prior; Bid-to-cover:8.1 x v 6.7x prior
Sold €830M in 6-month Bills; Avg Yield 1.839% v 1.700% prior; Bid-to-cover: 2.8x v 3.1x prior
Sold €770M in 12-month Bills; Avg Yield 2.101% v 3.505% prior; Bid-to-cover: 2.5x v 2.4x prior
Notes/Observations
Moody's maintains Spain sovereign at BAA3, lowest level of investment grade with a negative outlook
Spain PM Rajoy reportedly informs Germany's Merkel that rumors of credit line plans are inaccurate
BOE minutes: Differences of opinion on the need for more QE
UK claimant count data comes in a touch better
No decisions whatsoever expected at this week EU Leader Summit
Equities
Indices: FTSE 100 +0.40% at 5,891, DAX +0.20% at 7,388, CAC-40 +0.30% at 3,510, IBEX-35 +1.5% at 8,060, FTSE MIB +0.70% at 16,091, SMI flat at 6,772, S&P 500 Futures +0.10% at 1,450
European equity indices are trading broadly higher, led by the Spanish IBEX-35, as Moody's refrained from cutting Spain's sovereign bond rating to junk. However, the upside in markets has been capped ahead of Thursday's release of China's Q3 GDP data and this week's EU Summit.
Additionally, the comments out of Moody's have had a bigger impact on the credit markets, as Spain's bond yields have declined by over 20bps on the session. In terms of European banks, outperformers in the sector have included Bankia [BKIA.ES], BBVA [BBVA.ES], BNP [BNP.FR] and RBS [RBS.UK], while laggards include Barclays [BARC.UK], Credit Agricole [ACA.FR] and Santander [SAN.ES]. Resource related firms are broadly higher, following BHP's quarterly production update.
Shares of RBS [RBS.UK] have moved higher by over 2%, as the company confirmed that it would exit the UK government's Asset Protection Scheme (APS). 888 Holdings [888.UK] is higher by more than 7%, after the company guided its FY results to be above current market expectations. Shares of Cable & Wireless Communications [CWC.UK] have gained over 3%, after the company confirmed that it was looking to sell its stake in CTM. Dutch semiconductor equipment firm ASML [ASML.NL] is lower by over 2%, after reporting its Q3 results. Also, the company announced a plan to acquire laser manufacturer Cymer for €1.95B in cash and stock.
In Switzerland, Zurich Insurance [ZURN.CH] has declined by over 3%, after disclosing that it will take a writedown in Q3. In France, Credit Agricole [ACA.FR] has lagged most of its peers, as the firm finalized the sale process for its Greek unit (Emporiki).Danone [BN.FR] is lower by over 3.5%, after reporting weaker than expected Q3 like-for-like sales. Platform truck manufacturer, Haulotte Group [PIG.FR] has declined by over 5%, after releasing its 9-month sales figures. Peugeot [UG.FR] is trading higher by over 2%, amid reports that France is considering a plan to bailout its PSA Finance unit. Finland-based power generation solutions firm Wartsila [WRT1V.FI] is higher by over 7%, as the firm raised its FY outlook.