-Weakness in Dow Jones Transports presages deeper slowdown-FT
-Spanish banks may need over €100bn to recapitalize-Nomura
-Merkel and Hollande differ on banking supervision
-Eurozone authorities study leveraging ESM -Der Spiegel
-Greece denies speculation Troika has found €20bn deficit gap
-Spain´s de Guindos says country will not rush to ask for aid
-French PM calls for more fiscal stimulus in Europe

FTSE-100: -0.63%
Dax-30: -0.71%
Cac-40: -1.17%
FTSE-Mibtel 30: -1.42%
Ibex 35: -1.56%
Stoxx 600: -0.73%

The main European equity benchmarks are now registering larger falls than at the "opening bell." That following the differences aired by Germany and France, this weekend, over the time-table to grant the European Central Bank (ECB) supervisory powers over the Continent´s banks. That is a necessary precondition for Europe´s so-called rescue fund, the European Stability Mechanism (ESM), to be able to inject funds directly into Europe´s banks. Such is the current situation that some economists -fearing that the above is an essential part of any rescue mechanism- talk of "complacency" amongst European authorities.

Reflecting the above fears perhaps, the Financial Times comments today on how the Dow Jones Transports last week suffered its biggest decline for the year and is now down 2.2% since the start of January, versus a gain of 16.4% for the S&P 500. This when the Transports is supposed to track expectations for the wider economy. ¿A possible explanation for this divergence? Central bank actions and not expectations for greater economic activity say some.

No less important, investors may be wise to take heed of reports that Greece´s fiscal deficit may "overshoot" the Troika´s by a very large margin this year.

With similarly negative implications, economists at Nomura have issued a piece of research in which they warn that the recapitalization needs of Spain´s financial system may reach over €100bn. Private consultants Oliver&Wyman will publish the results of their audit of Spain´s financial system this next Friday.

Acting as a backdrop, the tensions around the Diaoyu islands continue to simmer.

Weakness in Basic Resources leads stocks down

German automotive supplier Continental is on track to reach its full-year targets and does not need to shorten workers' hours, the company´s Chief Executive has told the German press.

Peugeot does not intend to cut jobs or plants "at this stage", but domestic factories must improve productivity to match sites in Spain and Britain, the company´s COO has said.

From a sector stand-point the worst performers within the DJ Stoxx 600 are now the following: Basic resources (-2.06%), Construction (-1.74%) and Automobiles (-1.37%).
IFO on tap
Germany´s IFO business confidence index has come in at 101.4 points for the month of September (Consensus: 102.5).

Oil futures down
The euro/dollar is now off by 0.51% to the 1.2913 dollar level.

Front month Brent crude futures are now down by 1.19 dollars, to the 110.09 dollar mark on the ICE.



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