Economic Data
(DE) Germany May Import Price Index M/M: -0.7% v -0.6%e; Y/Y: 2.2% v 2.3%e
(FI) Finland June Business Confidence: -6 v -9 prior; Consumer Confidence: 5.8 v 12.0 prior
(DE) Germany June CPI Saxony M/M: -0.1% v -0.2% prior; Y/Y: 1.7% v 1.9% prior
(ES) Spain May Adjusted Real Retail Sales Y/Y: -4.9% v -8.1%e; Real Retail Sales Y/Y: -4.3% v -11.5% prior
(DE) Germany June CPI Brandenburg M/M: 0.1% v -0.2% prior; Y/Y: 1.8% v 2.0% prior
(DE) Germany June CPI Hesse M/M: 0.0% v -0.2% prior; Y/Y: 1.8% v 1.9% prior
(NO) Norway April AKU Unemployment Rate: 3.0% v 3.0%e
(TW) Taiwan May Leading Index M/M: 0.5% v 0.5% prior; Coincident Index M/M: 1.2% v 1.1% prior
(IT) Italy June Business Confidence: 88.9 v 85.5e
(UK) May BBA Loans for House Purchase: 30.2K v 33.0Ke
(IC) Iceland June CPI M/M: 0.5% v 0.0% prior; Y/Y: 5.4 v 5.4% prior
(RO) Romania Central Bank left Interest Rate unchanged at 5.25%; as expected
Fixed Income
(IN) India sold total INR150B vs. INR150B indicated in 3-month and 12-month Bills
(RU) Russia sold RUB13.9B v RUB35.0B indicated in Apr 2017 OFZ Bonds; Yield 8.28%
(EU) ECB allotted $2.6B in 7-day USD Liquidity Operations at 0.66% vs. $1.6B prior
(IT) Italy Debt Agency (Tesoro) sold €9.0B vs. €9.0B in 6-month Bills; Avg Yield 2.957% v 2.104% prior (highest since December 2011); Bid-to-cover: 1.62x v 1.61x prior
(EU) ECB allotted €26.2B in 3-Month Tender MRO vs. €25.0Be
Notes/Observations
German official clarifies German Chancellor Merkel alleged "drop dead" comments on eurobonds.
Egan-Jones cuts Germany Sovereign on Tues to A+ from AA- (Note: the 3 majors have Germany at AAA, Outlook stable).
French 2012 GDP growth to remain sluggish.
Spain Q2 GDP contraction to be worse than Q1.
Greece Pasok Leader Venizelos: Greek recession deepening while reforms stalling.
France, Germany signal guarded response on EU Van Rompuy report that proposes supervision of euro-zone banks be transferred to a European supervisor, possibly ECB.
UK BBA: May Net Mortgage Lending: -£100M v +£500M m/m first decline since records began in 1997.
Equities
FTSE 100 +0.30% at 5463, DAX +0.10% at 6144, CAC-40 +0.25% at 3020, IBEX-35 +0.60% at 6568, FTSE MIB +0.50% at 13,028, SMI +0.20% at 5968, S&P 500 Futures flat at 1315.25
Equity indices opened the session broadly higher, tracking yesterday's gains for US equities. Financials had a positive open, led by Italian banks. Equity markets have since pared gains, following cautious comments from the Bank of Spain regarding the country's Q2 economic outlook. Resource related companies are broadly lower, tracking the weakness in commodity prices. Overall, European investors are expected to remain cautious ahead of the Thursday/Friday EU summit.
In Germany, various large companies have issued cautious comments regarding their outlooks. Infineon [IFX.DE] is lower by over 2.5%, after cutting its Q3 sales growth forecast, while Siemens [SIE.DE] is trading lower as the company's CEO said the firm may have difficulty meeting its earnings targets (cited factors including slowdown in China). In the steel space, Salzgitter [SZG.DE] is lower by over 5%. The company said that it no longer expects to be able to achieve breakeven results for its steel unit this year. Coupled with the weakness in shares of Salzgitter, other German steel companies are also declining (Thyssenkrupp approx. 2% lower, Kloeckner -0.5%). Rhoen-Klinikum [RHK.DE] is trading higher by ~2% (near €21.50), as today is the deadline for shareholders to tender their stakes for Fresenius' €22.50/share offer for the company.
In London, shares of polymer manufacturer Yule Catto [YULC.UK] have declined by over 15%, after the company said that it is continuing to face challenging market conditions. Shares of miners Xstrata [XTA.UK] are Glencore [GLEN.UK] are both trading lower amid concerns that the shareholder votes related to their proposed merger could be delayed. According to a press report, large Xstrata shareholder Qatar Holdings (11% stake) is seeking a higher bid for the company. Standard Chartered [STAN.UK] opened slightly higher after issuing its H1 trading update, but shares have underperformed the other UK banks. Italian Bank Monti Paschi [BMPS.IT] opened the session higher by approx.2% after announcing its 2012-15 business plan and confirming its capital raising plans. In France ADP [ADP.FR] has declined by over 2%, as the company cut its 2015 targets. Belgium-listed computer/printing services company Colruyt [COLR.BE] has advanced by over 8%, as the company reported better than expected FY12 results.