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European Market Update: May 23, 2012

Published 05/23/2012, 06:33 AM
Updated 01/01/2017, 02:20 AM
UK100
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Euro hits fresh 2012 lows ahead of informal summit; More reports of an ECB contingency plan in the works

Economic Data

(GR) Greece Mar Current Account: -€2.1B v €1.1B prior

(NL) Netherlands Mar Consumer Spending Y/Y: % v -1.3% prior

(SE) Sweden Apr Unemployment Rate: % v 7.8%e

(EU) Euro Zone Apr Current Account: +€7.5B v -€5.6B prior; Current Account Seasonally Adj: +€7.5B v -€1.2B prior

(IT) Italy May Consumer Confidence: 86.5 v 89.5e (lowest reading on record after series began in 1996))

(ZA) South Africa Apr CPI (all items) M/M: 0.4% v 0.5%e; Y/Y: % v 6.2%e

(TW) Taiwan Apr Industrial Production Y/Y: -2.3% v -1.7%e; Commercial Sales Y/Y: -2.4% v -0.9% prior

(UK) Apr Retail Sales Ex Auto Fuel M/M: -1.0% v -0.7%e; Y/Y: -0.3% v +0.7%e

(UK) Apr Retail Sales with Auto Fuel M/M: -0.8%e v +1.8% prior; Y/Y: 1.8%e v 3.3% prior

(MA) Malaysia Apr CPI Y/Y: 1.9% v 2.2%e

(IT) Italy Apr Non-EU Trade Balance: -€904M v +€495M Prior

Fixed Income

(EU) ECB allotted $300M in 7-Day USD Liquidity Tender at fixed % vs. $300M prior

(EU) ECB allotted $10.3B in 3-month USD Liquidity Tender at fixed % vs. $5.2B prior

(SE) Sweden sold SEK10B in 3-month Bills; Yield 1.2307% v 1.3520 prior

(DE) Germany sold €4.55Bin 0.0% Jun 2014 Schatz; avg yield 0.07% v 0.14% prior; Bid-to-cover: 1.7x v 1.8x prior

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Notes/Observations

Bank of Japan (BOJ) leaves interest rates unchanged with no new stimulus measures

EU informal summit with Euro bonds likely the main issue

World Bank cuts China 2012 GDP forecasts to 8.2% from 8.4% prior

ECB said to be setting up team led by Asumssen to deal with possibly worsening of Greek crisis

UK Retail Sales weaker than expected

BOE minutes show Posen stays on the majority side

Vague dealer chatter circulating that a Dutch housing assoc might be going bankrupt with large swap exposure with the street

Global PMI data on Thursday

Equities

FTSE 100 -1.8% at 5306, DAX -1.7% at 6329, CAC-40 -1.9% at 3026, IBEX-35 -2% at 6531, FTSE MIB -2.8% at 13,083, SMI -0.70% at 5866

European equity indices opened the session broadly lower following negative leads from Asian and ahead of today's EU summit, which is expected to cover measures to improve growth. The weakest performing indices include the UK FTSE 100, Spain's IBEX-35 and Italy's FTSE MIB. European banks are broadly lower, led by weakness in the French, Italian and UK banks.

Shares of the London Stock Exchange [LSE.UK] have lost over 7%, as Intesa and Unicredit placed a stake in the company at a discount to the prior closing price. Cove Energy [COV.UK] is higher by over 9%, after receiving a takeover bid from Thailand-based PTT Exploration. Burberry [BRBY.UK] has declined by over 2%, as the company's full year sales missed analysts expectations, while First Group [FGP.UK] is trading higher after reporting its financial results. Belgium-listed Dexia [DEXB] has declined by more than 4%, on speculation that France and Belgium are seeking to have the EU extend certain guarantees provided to the firm. Bankia [BKIA.ES] is slightly lower, as Spain's government is due to present details of the bailout plan for the firm later today. In Germany, SAP is lower by over 1%, after agreeing to pay $4.3B to acquire US-based Ariba Technology. Deutsche Boerse [DB1.DE] has declined by over 1.5%, as there is speculation the firm could exit the EuroStoxx50 index. Steelmaker ThyssenKrupp has lost over 3%, as Fitch cut the company's credit outlook to negative from stable.

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