-Germany may be open to granting Spain a precautionary credit line
-Some Euro zone banks regaining access to unsecured funding-Barclays
-Spanish 10 year bond yields fell by 1bp to 5.81 per cent
-German 10 year bond yields rose by 7bp to 1.54 per cent

FTSE-100: 1.12%
Dax-30: 1.58%
Cac-40: 2.36%
FTSE-Mibtel 30: 2.53%
Ibex 35: 3.41%
Stoxx 600: 1.32%

European equity benchmarks finished the day sharply higher, particularly in the periphery, following reports that Germany may be open to granting Spain a precautionary credit line.

Thus, two German lawmakers, Michael Meister, and Norbert Barthle, the CDU's budget spokesman, said Germany is open to Spain's seeking a precautionary credit line from the euro area rescue fund. That would seem to contradict their Finance Minister's own position on the matter.

The above added to favourable sentiment this morning after the The Financial Times wrote that Spain may be close to asking for a bail-out, but that it was being delayed by considerations put forth by Germany and by worries over what the repercussions of that could be for Italy.

The Spanish Treasury sold 4.86bn euros in 12 and 18 month bills this morning, more than the 4.5bn which had been expected and at lower rates than the last time around.

Meantime, and in Greece, representatives of the Troika of lenders and their peers from the country's Labour Department broke talks today regarding workers' compensation. The latter are holding on to the "need" for workers to have six months' notice in case of dismissal and 24 months' worth of salary compensation. The Troika wants to cut those two magnitudes by half.

Perhaps critically, some analysts pointed out that they expect Greece to receive the next tranche of aid, despite growing concerns over the sustainability of its debt load.

Car sales off

Luxury group LVMH unveiled a further slowdown in comparable sales growth in the third quarter, to 6%.

Roche Holdings gained 0.4% after reporting third- quarter sales that exceeded analysts' estimates.

Car registrations in the European Union plummeted 11% to 1.13m vehicles last month from 1.27m a year earlier, according to data out from the Brussels-based European Automobile Manufacturers' Association (ACEA).

It was the 12th consecutive monthly drop and the biggest decline since October 2010.

As an aside, The Telegraph was reporting this morning that French business leaders are in a state of near panic over the seriousness of the current financial crisis.

From a sector stand-point the best performance was to be seen in the shares of the following industrial groups: Banks (2.93%), Insurance (2.43%) and Technology (2.03%).

Better than forecast economic numbers

Eurozone consumer prices for the month of September have come in at a 2.6% year-on-year rate of change (Consensus: 2.7%).

The German ZEW Institute's index of investor sentiment for the month of September increased to -11.5 points, after -18.2 points in the month before (Consensus: -14.9).

Slight gains in other asset classes

The euro/dollar is now up by 0.78% to the 1.3049 dollar mark.

Front month Brent crude futures are falling by 0.696 dollars to the 115 dollar mark on the ICE.



AB

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