Major European Manufacturing PMI Data At Fresh 3-Year Lows

(FI) Finland Jun PPI M/M: -0.7% v -0.3% prior; Y/Y: 0.5 v 0.9% prior

(FI) Finland Jun Unemployment Rate: 7.9 v 9.5% prior

(FR) France July Business Confidence: 90 v 92e; Production Outlook Indicator: -45 v -35e; Own-Company Production Outlook: -8 v -6e

(FR) France July Preliminary PMI Manufacturing: 43.6 v 45.5e (3-year low); PMI Services: 50.2 v 47.5e (6-month high)

(HU) Hungary May Retail Trade Y/Y: -2.5% v -2.0%e

(CZ) Czech July Business Confidence: 2.3 v 4.6 prior; Consumer Confidence: -28.3 v -29.3 prior; Composite: -3.8 v -2.2 prior

(ZA) South Africa May Leading Indicator: 130.8 v 131.9 prior

(ES) Spain Jun Producer Prices M/M: -0.5% v -0.1%e; Y/Y: 2.5% v 3.2% prior

(DE) Germany July Advanced PMI Manufacturing: 43.3 v 45.1e (three-year low); PMI Services: 49.7 v 50.0e

(EU) Eurozone July Advanced PMI Manufacturing: 44.1 v 45.2e (three-year low); PMI Services: 47.6 v 47.1e; PMI Composite: 46.4 v 46.4e

(IT) Italy Jun Non-EU Trade Balance: +€1.5B v +€306M prior month

(UK) Jun BBA Loans for House Purchase: 26.3K v 31.2Ke v 30.2K prior; lowest since Jan 2009

(HK) Hong Kong Jun Trade Balance (HKD): -44.7B v -39.5Be; Exports Y/Y: -4.8% v +1.8%e; Imports Y/Y: -2.9% v +1.5%e

(IE) Ireland Jun Property Prices M/M: -1.1% v +0.2% prior; Y/Y: -14.4% v -15.3% prior

Fixed Income
(NL) Netherlands Debt Agency (DSTA) sold €1.76B vs. €1.5-2.5B indicated range in 2014 and 2028 bonds

Sold €875Min 3.75% July 2014 DSL Bond; Avg Yield 0.003% v 0.523% prior

Sold €885M in 5.5% Jan 2028 DSL; Avg Yield 2.181% v 3.554% prior

(ES) Spain Debt Agency (Tesoro) sold total €3.05B vs. €2.0-3.0B indicated range in 3-Month and 6-Month Bills

Sold €1.63B in 3-month Bills; Avg Yield 2.434% v 2.362% prior; Bid-to-cover: 2.94x v 2.60x prior; Max Yield 2.650% v 2.500% prior

Sold €1.42B in 6-month Bills; Avg Yield 3.691% v 3.237% prior; Bid-to-cover: 3.02x v 2.82x prior; Max Yield 3.950% v 3.369% prior

(ZA)) South Africa sold total ZAR2.1B vs. ZAR2.1B indicated in 2023, 2041 and 2048 bonds

(CH) Switzerland sold CHF688.5M in 3-Month Bills; Avg Yield -0.600% vs. -0.699% prior

(EU) ECB allotted €130.7B vs €153Be in 7-Day Main Refinancing Tenderat fixed 0.75%

(HU) Hungary Debt Agency (AKK) sold HUF45B vs. HUF45B indicated in 3-Month Bills; Avg Yield 6.86% v 6.89% prior; Bid-to-cover: 1.79x v 2.95x prior

Notes/Observations
China July HSBC PMI Manufacturing at 5-month high but still registers its 9th month of contraction.

Moody's cuts core EMU AAA-rated outlook including Germany to negative; change is due to increased likelihood of a Greek euro exit and need for greater financial support for the weaker nations.

Fed's Raskin: Expects to talk about QE3 at the next FOMC meeting.

The big picture ideas for saving the euro currency will take years, not months, to come to fruition - but the threat of collapse is immediate.

Spain Bill auction results relatively smooth.

Major European PMI data mixed with Manufacturing at 3-year lows.

Equities
Indices: +0.10% at 5540, DAX -0.10% at 6412, CAC-40 -0.10% at 3099, IBEX035 -1.8% at 6066, FTSE MIB -0.90% at 12,594, SMI flat at 6180

European equity markets opened the session higher, following the sharp losses seen on Monday's session. However, equity indices have since pared gains amid losses in the Spanish and Italian equity markets. Banks are trading broadly lower and underperformers in the sector include BBVA [BBVA.ES], Santander [SAN.ES], Credit Agricole [ACA.FR] and BNP [BNP.FR]. Spanish and Italian banks are trading in negative territory amid higher peripheral bond yields, despite actions taken by regulators to deter short selling in the two countries. Resources-related companies are mostly higher, despite mixed commodity prices. As for corporate earnings, companies due to report during the US morning include Altria, AT&T, Dupont, Lockheed Martin, Peabody Energy, UPS and Whirlpool.

In London, BP [BP.UK] opened slightly higher after Russia's Rosneft confirmed that it was interested in the UK firm's stake in the TNK-BP joint venture. Fund manager Man Group [EMG.UK] has gained over 8% after the company announced H1 results and additional cost cuts. Imperial Tobacco [IMT.UK] has lost ~1%, following the release of its trading update. In other UK movers, shares of digital receiver maker Pace Plc [PIC.UK] have advanced by over 12% on the company's H1 results and outlook commentary.

In Germany, automakers have underperformed the DAX, amid speculation that Daimler [DAI.DE] could report weaker than expected results for Q2. The company is due to report earnings on Wed, July 25th. Among technology companies, SAP [SAP.DE] has traded slightly higher after reaffirming its FY outlook, while Software AG [SOW.DE] has gained over 5% following the release of its Q2 earnings report. Computer board maker Kontron AG [KBC.DE] has lost over 9% after issuing a profit warning. Dialog Semiconductor [DLG.DE] has declined by over 5%, after reporting weaker than expected Q2 sales.

French auto parts manufacturer Faurecia [EO.FR] is lower by more than 1%, as the company cut its FY operating profit forecast. STMicroelectronics [STM.FR] is lower by more than 2.5%, after the company reported weaker than expected Q2 earnings and Q3 guidance. In Switzerland, Swatch [UHR.CH] has gained over 1% after reporting better than expected H1 sales. Dutch telecom KPN [KPN.NL] is lower by ~1%, as the lowered its FY dividend. TomTom [TOM2.NL] has moved higher by over 10%, following the release of better than expected quarterly results. Belgian telecom services firm Mobistar [MOBB.BE] has lost over 7%, after the release of disappointing earnings.