LONDON (SHARECAST) - -Main Spanish opposition party against ECB rescue
-Barroso expected to announce proposal for banking union on Wednesday
-French PM announces 30bn euros in spending cuts
-Munchau (FT) warns against taking German approval of ESM as a given
-Troika rejects a few aspects of Greek deficit cutting proposals
-Spanish 10 year debt yields bounce back by 11 basis points, to 5.74%
FTSE-Mibtel 30: -0.43%
Ibex 35: -0.96%
Stoxx 600: -0.28%
European equities are now registering slight losses, with the exception of Spain, where the falls are now somewhat bigger.
That following weak data out of China and Japan over the weekend and ahead of a week full of potentially market-moving events. Chief amongst those is Wednesday´s ruling from Germany´s constitutional court over the legality of Europe´s new rescue fund, the so-called European Stability Mechanism (ESM). Investors, however, will also be watching the results of the Dutch elections –also on Wednesday- and the first results of the stress tests carried out on Spanish banks, tomorrow.
Not to be missed either, there is keen interest in the outcome of the US Federal Reserve´s policy meeting on Thursday.
Finally, Friday will see Eurozone finance ministers meet to discuss the situation in Greece and Spain. Interestingly in this regard, a source close to the European Central Bank (ECB) told The Sunday Times that everyone would rather prefer that Spain ask for aid before the week is out, lest markets become unsettled again.
Greek Prime Minister Antonis Samaras has failed to secure agreement from his coalition partners on €11.5bn of spending cuts required by the country’s lenders to release the funds which the country so desperately needs so as to recapitalize its banks. he is to meet representatives from the Troika of lenders today.
From a sector stand-point the worst performance on the DJ Stoxx 600 is now to be seen in the following industrial groups: Food (-1.38%), Health care (-1.04%), Telecommunications (-0.67%).
Lufthansa is gaining after a labor union agreed to halt strikes and accept mediation.
Philips has been downgraded by analysts at both Credit Suisse and Goldman Sachs.
Investor sentiment recovers on Draghi
The Sentix European investor confidence gauge improved to -23.2 points in September, after a reading of -30.3 for August (Consensus: -30.5).
The French central bank´s business confidence gauge rose to the 93 point level in August, above the 90 point reading seen in the month before (Consensus: 89).
French industrial production rose at a 0.9% month-on-month clip in July (Consensus: -0.5%).
Finland´s industrial production grew by 0.8% month-on-month un July (Consensus: -0.2%).
Italian second quarter gross domestic product contracted at a 0.8% quarter-on-quarter pace, versus the 0.7% fall forecast.
Slight profit-taking in the euro
The euro/dollar is now down by 0.20% to the 1.2790 dollar mark.
Front month Brent crude futures are now rising by 0.375 dollars to the 114.18 dollar level on the ICE.