- Selling pressure resumes in European equities
- Fitch says Spain pivotal, can drag region down
- Spanish house prices stable in January

FTSE-100: 0.02%
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FTSE Mibtel 30: -1.38%
Ibex 35: -0.80%
Stoxx 600: -0.51%

European equities have moved firmly into the red, coinciding roughly with the start of the US 'pre-market.' Hence, some commentary holds that the selling pressure to be seen this afternoon hails from the other side of the Atlantic, as traders in New York begin to arrive at their desks.

Ahead of tomorrow's European Council, this is what economists at Barclays Research had to say this morning of the apparent divisions between northern and southern Europe: "This negative signal, together with recent fears of political instability in Spain and in Italy, suggest that Europe is not yet out of the crisis, even though the ECB's threat of triggering the OMT should prevent a massive sell-off like in the first half of 2012."

Acting as a backdrop, ratings agency Fitch cut its outlook on The Netherlands to 'negative' from 'stable,' explaining that: "The government's multi-year fiscal consolidation plan is challenged by the difficult economic conditions (...) as highlighted by last week's nationalisation [of SNS] some banking system problems (and housing problems) persist, with three of the four major banks having faced severe financial difficulties and needing external support since 2008."

Be that as it may, Dutch long-term debt yields are now actually falling slightly.

For his part, Fitch Managing Director Ed Parker is reported to have said today in Oslo that "Spain is a pivotal country with the potential to drag the euro zone down again."

Also of interest, according to an investor survey carried out by Fitch 11% of participants still think the end-game will involve Greece and perhaps one or two other peripheral countries leaving the Eurozone. "Nevertheless, this is down sharply from the 21% who predicted this outcome just six months ago," the agency adds.

Volvo sees improvement in North Atlantic area in 2013

Swedish car and truck maker Volvo is rising despite posting an 84% fall in fourth-quarter profit. The company nevertheless expects the North American and European markets to improve in 2013.

US outfit Biogen Idec has agreed to buy partner Elan Corp.'s stake in the Tysabri multiple sclerosis drug for $3.25bn in cash plus future royalties.

The world's largest steel maker, ArcelorMittal, has reported better-than-expected earnings before interest, taxes, depreciation and amortization (EBITDA) for its fourth quarter, comfortably ahead of consensus estimates. The company expects a further increase this year as it ships more steel.

From a sector stand-point the worst performers today are: Chemicals (-1.61%), Insurance (-1.45%) and Banks (-1.38%).

Data-light calendar
German factory orders rose by 0.8% month-on-month in December (Consensus: 0.7%). Core orders that exclude volatile large transportation equipment orders rose for a third consecutive month (+0.6%) but their fourth quarter average still remains slightly (0.2%) below the third quarter level.

For the fourth quarter overall core orders from other euro area member states showed their first quarterly increase (+1.0% quarter-on-quarter) since the second quarter of 2011, indicating that the investment crunch in large parts of Southern Europe may be starting to ease, Barclays Research has indicated.

Spanish existing home were little changed month-on-month in January, marking the first month without a decline in three years, according to Fotocasa.es and IESE Business School.

Slight losses in other asset classes
The euro/dollar is now down by 0.54% to 1.3508.

Front month Brent crude futures are falling by 0.474 dollars to the 115.97 dollar level on the ICE.



AB

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