-Merkel and Schaeuble willing to let ESM/EFSF run in parallel -Der Spiegel
-CSU opposed to letting ESM/EFSF run in parallel -Der Spiegel
-Merkel government open to firewall compromise -Die Welt
-Banks' overnight deposits at ECB jump to €821bn from €777bn.

FTSE-100: -0.37%
Euro Stoxx 50: -1.20%
Dax-30: -1.33%
Cac-40: -0.99%
Ibex 35: -1.56%
FTSE MIB: -1.39%

The major European equity benchmarks have begun the day trading clearly lower, weighed upon by concerns on several fronts.

Perhaps the most immediate of the above has to do with the risk that Greece might not be able to achieve a sufficient take-up of its debt exchange offer, by its private sector creditors, by the 8th of March deadline. The result would be the first debt default of the 'euro-era'.

At least as relevant perhaps, China's decision, announced over the weekend, to lower its GDP growth target to 7.5% from 8% before.

There has also been quite a bit of market talk over the weekend regarding the recent run-up in oil prices, something which may be weighing on sentiment.

Of great importance as well, the latest Eurozone service sector data released this morning has come in clearly below expectations.

Not to be forgotten either, investors are awaiting the release of the latest US non-farm payrolls data this next Friday.

EQUITIES

Audi will invest €3bn in China to double its dealership network. The manufacturer hopes to grow faster than the Chinese market's predicted growth rate of 8%-10% this year.

Italian aerospace and defence group Finmeccanica has delayed the release of its 2011 results by two weeks. It may incur in an unexpected net loss of €2.5bn.

If we look at the DJ Stoxx Europe 600 the worst performers now are automobiles (-2.0%), basic resources (-1.87%) and banks (-1.82%).

MACROECONOMY

The Eurozone service sector PMI for the month of February has come in at 48.8 (Consensus: 49.4), after the previous month's reading of 50.4.

Italian producer prices rose by 0.7% month-on-month in January (Consensus: 0.6%).

Eurozone retail sales data are scheduled for release at 10am.

OTHER MARKETS

Front month Brent futures are down by 0.23% to $123.65/barrel in London.

The euro/dollar is off by 0.26% at $1.3165.

AB

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