-320bn euros have flowed out of periphery banks year-to-date -Bbg
-Draghi would support publishing minutes of ECB meetings
-BoJ move buoys risk sentiment
-Spanish 10 year bond yields fall by 10bp to 5.81%
-Tensions between Japan and China continue to simmer
-Printing money is the devil´s work -Weidmann

FTSE-100: 0.14%
Dax-30: 0.10%
Cac-40: 0.20%
FTSE-Mibtel 30: 0.55%
Ibex 35: 0.16%
Stoxx 600: 0.28%

The main European equity benchmarks continue to hold on to gains. That despite the lingering doubts regarding the sustainability of Spain´s current financial situation.

Worth noting, there are some reports that "officials" are studying the possibility of granting a credit line to the Meditteranean country, which would circumvent the German parliament while allowing the European Central Bank to initiate its program of "outright" bond purchases. It must be said, however, that such a move would probably provoke a firestorm of criticism in Germany.

As well, there are those, such as The Financial Times´ Martin Wolf, who warn that the US Federal Reserve´s third round of quantitative easing will likely fail to work as hoped for by Fed chairman Bernanke. Nevertheless, Mr. Wolf applauds the Fed´s decision in today´s FT, writing that, "The Fed has decided to err on the side of expansion."

Compensating for all of the above -at least for now- the Bank of Japan surprised markets this morning by announcing an expansion of its asset purchase program.

Cyclicals rise



Fashion retail giant Inditex is rising after posting a 32% jump in first-half year profit, beating expectations, thanks to solid growth in emerging markets.

Heineken is another big gainer today after receiving stakeholders´ backing for its acquisition of Asia Pacific Breweries.

From a sector stand-point the best performance on the DJ Stoxx 600 can now be seen in the following industrial groups: Automobiles (1.13%), Retail (0.70%) and health care (0.07%).



Light data calendar



Eurozone construction output fell by 0.3% month-on-month in July.



Slight gains in crude and in the single currency



Front month Brent crude futures are now falling by 1.128 dollars, to the 110.78 dollar per barrel mark on the ICE.

The euro/dollar is now dropping by 0.27% to the 1.3010 dollar level.



AB

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