-Hard cap on Eurozone rates unlikely but not ruled out
-Portugal's return to bond markets next year uncertain -Credit Suisse
-Nokia to unveil new phones
-German 10 year bond auction on tap
-Eurozone periphery bonds steady

FTSE-100:-0.55%
Dax-30: -0.27%
Cac-40: -0.26%
FTSE Mibtel 30: -0.91%
Ibex 35: -0.56%
Stoxx 600: -0.41%

The main European equity benchmark indices have begun today's session in a lacklustre fashion, weighed down by some weak economic data in Asia overnight. As well, investors and traders will likely be wary of making any moves in the final run-up to tomorrow's meeting of the European Central Bank's (ECB) governing council.

In particular, some observers believe that while the ECB will not yet disclose all of the details of its future bond market interventions -nor can it- it may at least clear up what the guiding principles will be. That is to say, will it establish caps on market interest rates, or limits on spreads or perhaps it may only look to lower volatility?

Worth pointing out perhaps, whilst some market commentary now points to a more neutral market positioning ahead of that meeting others warn that the risk has risen of markets being disappointed.

Thus, speaking yesterday French Prime Minister Hollande, while attempting to be encouraging, made it quite clear that investors shouldn't expect any immediate action: "The European Union should agree on solutions to the situation in Spain and Greece at the summit on October 18th and 19th," he said.

As the news broke yesterday, a Forex Live strategist blogged the following: "A summit! What a wonderful idea! Everything will be solved after a summit, won't it?"

Although the French president says leaders "should" get something done, just in case they don't, European Council Herman Van Rompuy has already confirmed this week that another summit will be held on November 22nd and 23rd.

All eyes on Nokia

Nokia is expected to grab the spotlight today, as it unveils its new phones. Some believe it may be the firm's last possibility to recover lost market share from the likes of Apple.

Richemont, the world's second largest luxury goods group has confirmed
its bullish outlook on Wednesday, saying sales continued to be healthy.

General Motors has reportedly balked at sharing its mid-sized car technology with PSA Peugeot Citroen, a German magazine reported on Tuesday, according to Reuters. That could potentially weaken the rationale for a broad alliance being negotiated by the two automakers.

Lufthansa is facing nationwide strikes on Friday, the UFO union announced yesterday.

From a sector stand-point the worst performance can now be seen in the following industrial groups: basic resources (-1.81%), oil (-1.31%) and construction (-0.81%).

Eurozone services PMI below expectations

The Eurozone's service sector purchasing manager's index for the month of August has come in at 47.2, after a reading of 47.5 for the month before (Consensus: 47.5).

The French PMI dropped to 49.2 in August, after a reading of 50 in the month before (Consensus: 50.2).

Slight falls in the Euro and oil futures

The euro/dollar is now down by 0.44% to the 1.2512 level.

Front month Brent crude futures are now off 0.079 dollars, to the 114.08 dollar mark on the ICE.

AB

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