- Volvo sees improvement in North Atlantic markets in 2013
- Fitch says Spain pivotal, can drag region down
- Banks deposited 178bn euros overnight at ECB

FTSE-100: 0.50%
Dax-30: 0.09%
Cac-40: -0.20%
FTSE Mibtel 30: -0.40%
Ibex 35: 0.15%
Stoxx 600: 0.28%

European equities have begun the day trading in a 'mixed' fashion ahead of tomorrow's European Council, at which European leaders will try to reach an agreement on the European Union's next long-term budget. As in any 'family', things can easily take a 'turn for the worse' when issues related to money crop up.

Be that as it may, this is what economists at Barclays Research had to say this morning of the apparent divisions between northern and southern Europe ahead of that venue: "This split reflects divergences across countries on their visions of a more integrated Europe and confirm our long-held view that discussions ahead of the June summit will be painful and lively.

"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."

Having said that, Dutch long-term debt yields are now trading flat in response to the above.

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 best performers today are: Financial services (1.51%), Travel&Leisure (1.15%) and Automobiles&Parts (0.96%).

Data-light calendar
German factory orders data is due for release at 11:00.

Slight losses in other asset classes
The euro/dollar is now down by 0.44% to 1.3523.

Front month Brent crude futures are falling by 0.181 dollars to the 116.31 dollar level on the ICE.



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