Heading into the North American open, equities in Europe are trading higher, apart from the Spanish Ibex, which has underperformed its peers as market participants reacted to yesterday's expiration of the short-selling ban in Spain. Elsewhere, in spite of opening sharply lower after acknowledging reports that it is to take an impairment charge, Credit Agricole (+2.5%) shares staged an impressive come back and are now one of the best performing stocks in Europe. Of note, co. said that charges mainly reflect tighter regulatory requirements as well as macroeconomic and financial environment. The risk on sentiment was in part supported by the latest HSBC Manufacturing report from China, which hit a two-year high, as well as an encouraging set of EU related PMIs released this morning. Looking elsewhere, EUR/USD erased barriers at 1.3600/50 and 1.3675 which consequently lifted gamma and saw the 1-month risk/reversal trade at its highest level in almost 3-years. Of note, the EONIA curve bull flattened after the ECB said that banks will repay EUR 3.484bln in 3y loans (exp. EUR 20bln). Finally, going forward, market participants will now await the release of the latest jobs report from the BLS at 1330GMT (0730CST).
Print 12:12, 01 Feb 2013 - Market Analysis - Source: RANsquawk
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