News Headline Summary

EU MID-SESSION UPDATE - 06/12/12

European equity markets are trading in positive territory this morning as markets react to Van Rompuy’s report on a revamp in monetary union. Markets have reacted to comments in the report that said a Euro budget could be the basis for common debt issuance in the Eurozone. Basic Materials (+1.38%) continue to outperform other sectors in Europe, following on from yesterday’s Politburo comments on further construction in under-developed regions in China. GDF Suez has been the big lagger in Europe, currently trading down over 11.5% after they announced that the economic slump will cut company profits in 2013.

In terms of data releases, Eurozone GDP for Q3 printed in-line with expectations although German Factory Orders beat expectations at 3.9% vs. Exp. 1.0%. Immediate reaction saw EUR/USD move to the upside although focus remains on today’s ECB and BoE rate decisions. Neither central bank is expected to make any new policy decisions although the ECB could cut their CPI outlook.

In other European news, Italian PM Monti won a confidence vote on growth measures however Berlusconi’s PDL party walked out of the senate ahead of the vote. Initial risk-on moves were seen with Dec-Dax moving higher and Mar-Bund moving lower although as the session progressed, equity markets and particular Italian listed equities came under selling pressure given the lack of support for Monti with unconfirmed chatter that the PM could resign as early as today.

Looking ahead, the ECB and BoE rate decisions are the two key announcements today with Draghi’s press conference being closely watched. Elsewhere, US weekly jobs data is due to be released at 1330GMT/0730CST.

Print 11:54, 06 Dec 2012 - Market Analysis - Source: RANsquawk