- S&P's Kraemer says Portugal, Italy, Spain and France could be downgraded
- ECB: Constancio says negative interest rates always possible
- ECB: Professional forecasters cut GDP view for 2013/2014
- Spanish banks recourse to ECB dropped in January
- Banks deposited 125.6bn euros overnight at ECB

FTSE-100: -0.55%
Dax-30: -0.89%
Cac-40: -0.56%
FTSE Mibtel 30: -0.88%
Ibex 35: -1.34%
Stoxx 600: -0.28%

Europe's main equity benchmarks have tapered their earlier falls slightly. What were supposed to be a string of largely backwards-looking and somewhat tardy (many Eurozone economic figures are typically published with a large lag) statistics on economic growth in various of the Continent's main economies have surprised on the downside by a significant margin.

That came on the back of similarly weaker than expected (albeit notoriously volatile) GDP statistics out of Japan overnight. No less encouraging were remarks from French civil servants to the effect that the country may not meet this year's fiscal deficit targets.

For their part, this is what they had to say over at Barclays Research "while we now expect the French government to revise its growth forecast down to 0.3% for 2013, stick to the already decided 2% structural adjustment this year and request a postponement of its targets, the EC and other member states are likely to use the situation to lock in a firm commitment by the French government to engage in structural policies."

Coincidence or not, Standard&Poor's analysts this morning indicated that Portugal, Italy, Spain and France's debt ratings could be downgraded this year.

In a more positive vein, the Financial Times calls attention today to plans to create a free-trade area in the North Atlantic.

Continental divide widens, European companies wary

The outlook from some of Europe's main companies, such as AMEC or Nestle, has also come in worse than expected this morning.

Perhaps symptomatic of the fact that the Continental divide is wider than ever nowadays, whereas in the United States firms are being rewarded for increasing levels of capital expenditure (this is the reading which some observers make of the current situation) in Europe companies are still wary of doing so.

French lender BNP Paribas has unveiled a three-year plan to save €2bn in annual costs and ramp up growth in Asia after its fourth-quarter profits were hit by Europe's weak economy.

Swiss outfit Nestle, the world's biggest food company, said it expects
2013 to be as challenging as 2012.

Intriguingly, French spirits giant Pernod Ricard unveiled a slowdown in sales in France and Spain for the second quarter, but solid growth in the United States, while it kept its full-year outlook of slower profit growth.

Advertising agency Publicis also warned of a difficult year in 2013 although its 2012 revenues got a big lift out of Asia.

From a sector stand-point the best performers today are: Telecommunications (-0.99%), Retail (-0.92%) and Oil&Gas (-0.88%).

Portuguese GDP craters

Eurozone gross domestic product contracted at 0.6% quarter-on-quarter rate in the last three months of last year (Consensus: -0.4%). Worth pointing out are the very sharp rates of contraction seen in some countries - in the periphery - such as Portugal.

Economic activity in the Iberian country dropped by 1.8% in terms of quarterly rates of change (Consensus: -1.0%).

In parallel, and as is evident from the results of the European Central Bank's poll of professional forecasters out this morning, economists have cut their view on the Eurozone's growth prospects for this year and next.

French wages grew at a 0.5% quarterly pace in the fourth quarter of 2012 (Consensus: 0.5%).

Other asset classes trading mixed
The euro/dollar is now lower by 0.86% to 1.3334 level.

Front month Brent crude futures are sliding slightly lower, by 0.417 dollars to the 117.39 dollar level on the ICE.



AB

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