- European equities move higher ahead of ECB
- Spanish long-term debt yields fall after auction
- Lower than forecast German industrial production

FTSE-100: -0.33%
Dax-30: 0.64%
Cac-40: 0.33%
FTSE Mibtel 30: 0.99%
Ibex 35: 1.04%
Stoxx 600: 0.44%

European stocks are moving somewhat higher ahead of this afternoon's European Central Bank (ECB) policy meeting.

Expectations, nevertheless, are that investors have bet too heavily that ECB President Mario Draghi will voice opposition to the recent rise in the euro's value. Of interest, however, is the possibility that he will warn banks not to be too hasty in returning the liquidity which they borrowed from it, or not. The latter may well determine the single currency's reaction.

Of interest in any case, Barclays Research today takes the same view which can be heard quite loudly of late as regards the poor outlook for the Euro this year, its recent sharp appreciation notwithstanding.

The Spanish Treasury today auctioned €4.6bn in long-term debt, slightly ahead of the amount targeted, albeit at higher yields and with lower bid-to-cover ratios versus the last time around.

Of possible interest as well, Reuters today points out how the broad DJ Stoxx Europe 600 index trades is trading at an average price-to-book ratio of 1.6, well below a 10-year average of 2.1, versus Wall Street's 2.2. Undervalued or correctly priced?

In terms of its price-to-earnings ratio the Stoxx is trading at 12 times its forward earnings, its best level in nearly three years, although still below a 10-year average of 12.2.

Sanofi guides lower

Investment bank Credit Suisse on Thursday announced further costs cuts, after fourth-quarter net profit missed expectations.

French pharmaceutical giant Sanofi is moving lower after reporting a 24% decline in fourth-quarter profit. More damningly, the company is warning that earnings per share may drop by as much as 5% this year due to competition for some of its star products from generics.

Shares of Alcatel Lucent are moving higher after releasing its own results and announcing that its Chief Executive Officer is to step down.

From a sector stand-point the best performers today are: Automobiles&Parts (1.28%), Travel (1.23%), Telecommunications (0.98%).

Data-light calendar
German industrial production contracted by 1.5% year-on-year in December (Consensus: -0.5%).

Slight losses in other asset classes
The euro/dollar is now falling by 0.42% to 1.3460.

Front month Brent crude futures are again moving higher, by 0.807 dollars to the 117.70 dollar level on the ICE.



AB

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