- US and Europe may adopt common stance on currency devaluations -WSJ
- Eurozone finance ministers studying possible 'bail-in' of Cyprus
- Goldman Sachs lowers view on equities to neutral
FTSE Mibtel 30: -0.55%
Ibex 35: -0.49%
Stoxx 600: -0.35%
European stocks are still seeing some slight selling pressure at the midday mark ahead of this evening´s meeting of the so-called Eurogroup. Eurozone finance ministers are expected to discuss the need - and possible modalities - of a bail-out of Cyprus and its banks. Also on the agenda may be the recent sharp moves in currency markets, especially ahead of this week´s meeting of G20 finance ministers, where the matter is expected to be discussed.
Particularly worth noting, according to The Financial Times a radical new option (one of three being studied) for the financial rescue of Cyprus would force losses on uninsured depositors in Cypriot banks, as well as investors in the country's sovereign bonds.
Of interest, the recent rise in periphery sovereign risk premiums has had a dampening effect on investor demand for Southern European equities, the latest data from EPFR Global shows. Such funds saw $264m in redemptions last week.
For its part, last Friday Goldman Sachs went neutral (from overweight) on global equities on a three month view, although it remains overweight on a 12 month view. According to their strategists, "some US fiscal uncertainty remains and the European sovereign situation could deteriorate again, but we see risks as smaller than last year."
Speaking over the weekend however ECB council member Jorg Asmussen was cited as saying that an agreement on how to rescue Cyprus is likely by the end of the March.
Acting as a backdrop, The Wall Street Journal reports that US and European leaders are preparing to adopt a common stance as regards the need for 'market driven' exchange rates
ahead of this week´s meeting of G-20 finance ministers. It would seem that the rapid pace of Yen
weakness has set off fears of a possible round of competitive devaluations.
Novo Nordisk plummets
Novo Nordisk has failed to win approval from US regulatory authorities for a new insulin treatment as regulators seek to better assess heart risk. Shares of the company are now falling by 12%.
Dutch retailer Ahold has sold its 60% stake in Swedish supermarket chain ICA for approximately 20bn Swedish kronas ($3.1bn) to Hakon Invest.
Troubled Italian lender Monte Paschi di Siena is ready to clear the way to receive €3.9bn ($5.2bn) in state backing in a "very short time", according to remarks from the bank's Chairman.
From a sector stand-point the worst performers today are: Travel (-0.89%), Basic resources (-0.81%) and Oil (-0.75%).
Light data calendar
French manufacturing sector output increased by 0.1% month-on-month in December in spite of industrial production as a whole decreasing by the same amount.
Other asset classes trading mixed
The euro/dollar is now edging higher by 0.15% to 1.3390.
Front month Brent crude futures are falling, by 0.643 dollars to the 118.14 dollar
level on the ICE.