European Market Update: April 24, 2012

(EU) ECB: €562M borrowed in overnight loan facility v €311M prior; €767.8B parked in deposit facility v €775.7B prior.

(CH) Swiss Mar Trade Balance (CHF): 1.7B v 3.0Be; Real Exports M/M:-2.5% v +1.0%e; Real Imports M/M: 4.6% v -12.2% prior.

(FI) Finland Mar PPI M/M: 0.4% v 0.8%e; Y/Y: 1.4% v 1.8%e.

(FI) Finland Mar Unemployment Rate: 8.5% v 8.2%e.

(CH) Swiss Mar UBS Consumption Indicator: 1.22 v 0.90 prior.

(FR) France Apr Consumer Confidence: 88 v 87e; Business Survey Overall Demand: +4 v -8 prior.

(ES) Spain Feb Mortgages-capital loaned Y/Y: -49.6 v -34.0% prior; Mortgages on Houses Y/Y: -47.1 v -41.3% prior.

(CZ) Czech Apr Business Confidence: +7.5 v +9.6 prior; Consumer Confidence: -29.3 v -29.5 prior; Composite: +0.2 v +1.7 prior.

(HU) Hungary Feb Retail Trade Y/Y: -1.4% v +0.2%e.

(ZA) South Africa Feb Leading Indicator: 134.4 v 132.9 prior.

(AT) Austria Feb Industrial Production M/M: -1.4% v +2.5% prior; Y/Y: -0.9% v +2.2% prior.

(SE) Sweden Mar Unemployment Rate: 7.7% v 8.0%e.

(IT) Italy Mar Hourly Wages M/M: 0.0% v 0.0% prior; Y/Y: 1.2% v 1.4% prior.

(UK) Mar Public Finances (PSNCR): £16.5B v £13.0Be; Public Sector Net Borrowing: £15.9B v £14.2Be; PSNB ex Interventions: £18.2B v £16.0Be.

(HK) Hong Kong Mar Trade Balance (HKD): -43.9B v -45.4Be; Exports Y/Y: -6.8% v +4.0%e; Imports Y/Y: -4.7% v +5.0%.

(IC) Iceland Mar Wage Index M/M: 1.1 v 2.1% prior; Y/Y: 12.1 v 11.3% prior.

Fixed Income

DMO opened its syndication for its 3.75% 2052 Gilt; guidance seen 2.5-3.0bps over 4.25% 2049 Gilt.

EFSF set its price on €2.0B 2019 bonds at 80bps over mid-swaps.

(NL) Netherlands Debt Agency (DSTA) sold approx €2.0B vs. €1.5-2.5B indicated rangein 2014 and 2037 DSL Bonds.

Sold €1.0B in 3.75% July 2014 DSL Bond; Avg Yield 0.523% (No comparable).

Sold €995M in in 4% Jan 2037 DSL Bond; Avg Yield 2.782% (No comparable).

(DK) Denmark sold total DKK4.3B in 2014 and 2021 Bonds.

(ES) Spain Debt Agency (Tesoro) sold approx €1.94B vs. €1.0-2.0B indicated range in 3-Month and 6-Month.

Sold €725M in 3-month Bills; Avg Yield 0.634% v 0.381% prior; Bid-to-cover: 7.61x v 3.51x; Max Yield 0.720% v 0.428% prior.

Sold €1.2B in 6-month Bills; Avg Yield 01.580% v 0.836% prior; Bid-to-cover: 3.25x v 5.56x prior; Max Yield 1.628% v 0.868% prior.

(IT) Italy Debt Agency (Tesoro) sold €2.5B vs. €2.5B indicated in Zero Coupon Jan 2014 Notes (CTZ); Yield at 3.355% v 3.013% prior; bid-to-cover 1.79x v 1.93x prior.

(IT) Italy Debt Agency (Tesoro) sold €943M vs. €0.5-1.0B indicated range in I/L 2017 and 2019 BPTi Bonds.

(ZA) South Africa sold total ZAR2.1B vs. ZAR2.1B indicated in 2017, 2036 and 2041 bonds.

(EU) ECB allotted €46.4B in 7-Day Main Refinancing Tender at fixed 1.00% vs. €50Be.

(HU) Hungary Debt Agency (AKK) sold HUF50B in 3-Month Bills; Avg Yield 7.29% v 7.28% prior; Bid-to-cover: 1.69x v 1.41x prior.

Notes/Observations

Australia low CPI reading opens door future easing; its 10-year Govt yields hit all time lows.

China Mar FX Reserves decline.

UK public sector net borrowing (PSNB) ex Interventions at highest since Nov 2010; yet DMO trims FY12/13 Gilt financing.

Spain sells Bills at higher yields and mixed bid-to-cover.

Netherlands gets off its bond auction relatively easy.

Equities

Indices: FTSE 100 +0.50% at 5691, DAX +0.90% at 6579, CAC-40 +1% at 3130, IBEX-35 +1.6% at 6953, FTSE MIB +1.9% at 14,103, SMI +0.10% at 6121.

European equity indices have rebounded from the sharp losses seen during the prior session, with today's gains being led by sectors which have recently underperformed. Overall, the equity markets have tracked the tightening in European peripheral debt spreads and lower yields for the Netherlands.

In Belgium, shares of Solvay [SOLB.BE] have gained over 5%, after the company issued its Q1 trading update. Dutch telecom company, KPN [KPN.NL] is higher by about 3%, as the company reported in line Q1 results and reaffirmed its full year forecast. Shares of ARM Holdings [ARM.UK], Panmure Gordon [PMR.UK], Carpetright [CPR.UK], Capita Group [CPI.UK] and 888 Holdings [888.UK] are all trading lower after the release of their respective earnings reports.

Homebuilder Redrow [RDW.UK] has gained over 4%, after reporting its trading update, while Associated British Foods [ABF.UK] is higher by more than 1% following its earnings release. In M&A news, Cove Energy [COV.UK] has gained over 3%, as the company noted that its board would recommend a £1.12B buyout offer from Royal Dutch Shell. Novartis [NOVN.CH] has declined by more than 1%, after reporting weaker than expected Q1 results.

Swedish names Scania [SCVB.SE] and Nordea [NDA.SE] are trading higher following the release of their respective Q1 earnings reports. In Germany, Lufthansa [LHA.DE] is higher by more than 2%, supported by broker commentary, while ADVA AG [ADV.DE] has gained more than 4% after reporting earnings. In France, auto supplier Faurecia [EO.FR] is higher by over 1.5% after reporting Q1 sales. Michelin [ML.FR] is higher by over 6%, following the release of its Q1 figures.