Friday's European Market Update

Trading today should be dominated by position-squaring and features busy calendar as data released before the holidays

House Speaker Boehner: cancels vote on "Plan B" fiscal cliff bill as he did not have votes to pass; House will adjourn until after Christmas; S&P slumps over 35 handles as a result at one point; embarrassing defeat after conservative Republicans refused to support legislation that would allow taxes to rise on the most affluent households in the country

• Japanese Govt government maintains view that economy continues to weaken
• France stats agency INSEE: France will not meet 2013 growth target of 0.8%.
• S&P cuts Cyprus sovereign rating to CCC+ from B (two-notches); Outlook Negative
• IMF said to want ESM to recapitalize the Cyprus banking sector directly as it is the only way the country can avoid excessive debt levels
• UK 3rd and final GDP reading is mixed

If you're reading this after 06:11 ET (11:11 GMT) then the Mayan calendar must have been reset but still have triple witching to live through today

Economic Data

• (RU) Russia Narrow Money Supply w/e Dec 17th: 7.37T v 7.21T prior
• (DE) Germany Jan GfK Consumer Confidence: 5.6 v 5.9e
• (FI) Finland Nov Unemployment Rate: 7.3% v 6.9% prior
• (FI) Finland Nov PPI M/M: -0.3% v -0.5% prior; Y/Y: % v 1.7% prior
• (DE) Germany Oct Construction Order NSA +30.5% y/y; YTD +6.3% y/y
• (ZA) South Africa Nov Budget Balance (ZAR): -33.3B v -23.6 prior
• (FR) France Dec Business Confidence: 89 v 89e; Production Outlook Indicator: -38 v -42e; Own-Company Production Outlook: -9 v -7 prior
• (CH) Swiss Nov M3 Money Supply Y/Y: 9,3% v 8.6e
• (ES) Spain Nov Producer Prices M/M: -0.5% v -0.2%e; Y/Y: 2.8% v 3.1%e
• (HU) Hungary Oct Retail Trade Y/Y:-3.7% v -2.6%e
• (HU) Hungary Oct Final Trade Balance: €646.9M v €657.6M prelim
• (DK) Denmark Q3 Final GDP Q/Q: 0.3% v 0.1%e; Y/Y: -0.3% v -0.5%e
• (EU) ECB: €1.94B borrowed in overnight loan facility vs. €913.0M prior; €231.5B parked in deposit facility vs. €232.6B prior
• (AT) Austria Oct Industrial Production M/M: -0.6% v -1.8% prior; Y/Y: 1.3% v 2.0% prior
• (NL) Netherlands Nov House Price Index M/M: +0.3% v -0.2% prior; Y/Y: -7.0% v -7.8% prior
• (NL) Netherlands Q3 Final GDP -0.9% v -1.1% prelim; Y/Y: -1.5% v -1.6% prelim
• (HK) Hong Kong Q3 Current Account: +$29.2B v -$7.8B prior; Overall Balance of Payments: +$37.9B v -$7.1B prior
• (PL) Poland Nov Retail Sales M/M: -6.4% v -5.8%e; Y/Y: 2.4% v 3.0%e
• (PL) Poland Nov Unemployment Rate: 12.9% v 12.8%e
• (IC) Iceland Dec CPI M/M: 0.1 v 0.3% prior; Y/Y: 4.2 v 4.5% prior
• (IC) Iceland Nov Wage Index M/M: 0.2 v 0.1% prior; Y/Y: 5.0 v 5.1% prior
• (IT) Italy Nov Hourly Wages M/M: 0.1 v 0.2% prior; Y/Y: No est v 1.5% prior
• (NO) Norway Dec Unemployment Rate: 2.4% v 2.3%e
• (UK) Nov Public Finances (PSNCR):-£6.8B v -£1.0Be; PSNB ex Interventions: £17.5B v £16.0Be; Public Sector Net Borrowing: £15.3B v £14.1Be
• (UK) Q3 Current Account: -£12.8B v -£14.0Be
• (UK) Q3 Final GDP Q/Q: 0.9% v 1.0%e; Y/Y: 0.0% v -0.1%e
• (UK) Q3 Final Total Business Investment: Q/Q: 3.8% v 3.7%e; Y/Y: 5.1% v 4.5%e
• (UK) Oct Index of Services M/M: +0.1% v -0.2%e; 3M/3M: 1.1% v 1.1%e
• (BE) Belgium Dec CPI M/M: 0.0% v -0.1% prior; Y/Y: 2.2% v 2.3% prior
• (IT) Italy Dec Consumer Confidence: 85.7 v 85.1e
• (BR) Brazil Dec FGV Consumer Confidence: 118.7 v 120.0 prior
• (BR) Brazil Dec FGV Construction Costs M/M: 0.3% v 0.5%e

• (IN) India sold total INR120B vs. INR120B indicated in 2017, 2022 and 203 bonds
• (DK) Denmark sold total DKK4.7B in 2-month, 6-month bills and 9-month Bills

Indices:

• FTSE 100 -1% at 5,900
• DAX -1% at 7,598
• CAC-40 -0.80% at 3,638
• IBEX-35 -0.60% at 8,217
• FTSE MIB -0.90% at 16,253
• SMI -0.60% at 6,874
• S&P 500 Futures -1.6% at 1,417

European equity markets have tracked the declines in U.S. futures, as the U.S. House of Representatives said no vote would be held on the Republican's Plan B solution for the fiscal cliff until after Christmas, as the measure did not have enough support to pass. The Plan B proposal called for extending the Bush era tax cuts for people with incomes under $1M. In the past, President Obama had threatened to veto the Republican proposal. Broad losses have been seen in the banking sector and underperformers include Barclays, Commerzbank, Credit Agricole, Deutsche Bank and UBS. Also, resource related companies are trading lower, amid the recent declines in commodity prices.

UK Movers [BAE Systems -2.2% (confirmed £2.5B contract with Oman), William Hill (to acquire units from Sportingbet); Aviva +1% (to sell USA unit for $1.8B)]

Germany Movers [Deutsche Bank -2.4% (broad weakness in banking sector, concerns related litigation matters) Air Berlin -2.1% (emergency landing in Thailand); SMA Solar +4.5% (Chinese acquisition), Infineon +1% (broker upgrade)]

France Movers [ADP -6% (reduced 2015 targets), Peugeot -2.7% (EU officials to review terms of aid package)]

Dutch Movers [ArcelorMittal -3% ($4.3B impairment charge related to European business)]

Italy Movers [Fiat -2% (renewed capital raise concerns)]

Switzerland Movers [Holcim -1.9% (broad weakness in cement firms), Panalpina -1.2% (impairment charge)]

Belgium Movers [TiGenix -8% (share placement)]

Finland Movers [Nokia -3% (patent license agreement with RIM, RIM earnings)]