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European Market Update: Risk Appetite Buoyed By Potential Greek PSI Deal

By Trade The NewsStock MarketsJan 26, 2012 07:27AM ET
www.investing.com/analysis/european-market-update:-risk-appetite-buoyed-by-potential-greek-psi-deal-112254
European Market Update: Risk Appetite Buoyed By Potential Greek PSI Deal
By Trade The News   |  Jan 26, 2012 07:27AM ET
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Risk appetite buoyed by reports that private lenders said to have accepted lower interest rate in Greek PSI deal

Economic Data

(EU) ECB: €3.5B borrowed in overnight loan facility v €3.6B prior; €484.1B parked in deposit facility vs. €485.8B prior

(RU) Russia Gold & Forex Reserve w/e Jan 20th: $499.7B v $497.1B prior

(DE) Germany Feb GfK Consumer Confidence Survey: 5.9 v 5.6e

(FR) France Jan Consumer Confidence: 81 v 80e

(DK) Denmark Dec Unemployment Rate: 4.0% v 4.3%e; Gross Unemployment Rate: 6.1% v 6.3%e

(SE) Sweden Jan Consumer Confidence: -1.3 v -7.0e; Manufacturing Confidence: -14 v -11e; Economic Tendency Survey: 91.4 v 93.0e

(HK) Hong Kong Dec Trade Balance (HKD): -48.9B v -54.4e; Exports Y/Y: 7.4% v 3.5%e; Imports Y/Y: 8.1% v 6.6%e

(SE) Sweden Dec PPI M/M: -0.2% v -0.4%e; Y/Y: -2.1% v -2.3%e

(SE) Sweden Dec Trade Balance (SEK): 2.8B v 6.5Be

(SE) Sweden Dec Unemployment Rate: 7.1% v 7.0%e

(IT) Italy Jan Consumer Confidence: 91.6 v 92.0e

(ZA) South Africa Dec PPI M/M: 0.0% v 0.2%e; Y/Y: 9.8% v 10.0e%e

(IT) Italy Dec Hourly Wages M/M: 0.0% v 0.0% prior; Y/Y: 1.4% v 1.5% prior

(BR) Brazil Jan FGV Construction Costs M/M: 0.7% v 0.7%e

Fixed Income:

(IT) Italy Debt Agency (Tesoro) sold €4.5B vs. €4.5B indicated in new Zero Coupon 2014 CTZ; Avg Yield 3.673% v 4.853% prior; Bid-to-cover: 1.7x v 2.24x prior

(IT) Italy Debt Agency (Tesoro) sold €500M v €250-500M indicated range in 2.15% 2014 I/L Bonds; Yield 3.20%; Bid-to-cover: 2.79x

(HU) Hungary Debt Agency (AKK) sold total HUF48B in 2014, 2017 and 2022 Bonds

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Notes/Observations

Fed Chairman Bernanke signals years of low interest rates ahead with potential more stimulus. Fed stance appears to be pro inflationary

Dow approaching 3 highs

US Tsy Sec Geithner will not participate in any Obama second term

Reports that private creditors were willing to accept a lower coupon in the PSI negotiations

Equities:

FTSE 100 +1.14% at 5788, DAX +1.36% at 6508, CAC-40 +1.11% at 33491, IBEX-35 +1.36% at 8671, FTSE MIB +1.61% at 16,095, SMI +0.3% at 6090

European equity indices opened the session higher, as the US Fed disclosed that 11 out of 17 of its members saw the FOMC raising the Fed funds rate in 2014 or later. Ahead of the Fed meeting, there were expectations in the market that the Fed would not raise rates until at least mid-2014. Since the open, indices have continued to gain on renewed optimism related to the Greece private sector involvement talks, after a Greek press report, without citing sources, said Greece's private lenders were said to be willing to accept a coupon rate of below 4% on new Greek bonds. In the past, it was reported that Greece's private lenders were seeking a coupon of at least 4%.

In individual stocks, French name Plastic Omnium [POM.FR] has gained over 5%, after reporting Q4 sales. In the UK, Anglo American [AAL.UK] and Kazakhmys [KAZ.UK] are higher following the release of their production reports. Misys [MSY.UK] has declined by over 6%, after issuing first half results. German polysilicon name Wacker Chemie [WCH.DE] has moved between gains and losses following the release of its Q4 earnings. In Switzerland, Logitech [LOGN.CH] is down over 10%, as the company's quarterly results missed expectations. Companies due to report later today include, Nokia [NOK1V.FI], Areva [AREVA.FR], Britsol-Myers Squibb [BMY], Caterpillar [CAT], Colgate [CL], 3M [MMM], Potash [POT] and AT&T [T].
European Market Update: Risk Appetite Buoyed By Potential Greek PSI Deal
 
European Market Update: Risk Appetite Buoyed By Potential Greek PSI Deal

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