Europe midday: Germany willing to negotiate on shared debt?

Date: Thursday 28 Jun 2012

-Spanish 10 year bond yield backs off towards 6.95%
-Germany blinks on shared debt-WSJ
-Italian debt auction results more or less in-line
-German official warns against high expectations

FTSE-100: -1.16%
Dax-30: -1.68%
Cac-40: -0.69%
Stoxx 600: -0.87%
FTSE Mibtel: 0.01%
Ibex 35: 0.18%

The major European equity benchmarks are holding near their worst levels of the day, with large losses. That as the European Union´s summit kicks off and with some German government officials having warned against high expectations this morning.

That apparently led to selling pressure on periphery bond yields early on as markets moved to temper their expectations for today and tomorrow´s summit.

However, in an interview with The Wall Street Journal German Finance Minister Wolfgang Schauble has indicated that his country may be willing to move sooner than expected to accept shared liability of Eurozone debt and would support short-term measures to deal with the acute financing problems facing some of the region´s governments.

The key for Berlin is that the path toward establishing centralized European controls over national fiscal policy is irreversible. That could happen before full implementation of treaty changes.

French firms actively restructuring and redeploying

Veolia Environment has sold its regulated UK water business to Rift Acquisitions Ltd. for an enterprise value of £1.236bn as part of its restructuring.

Danone will pay €550m to take control of Morocco's dairy product company Centrale Laitiere.

From a sector stand-point the worst performance now on the DJ Stoxx 600 is to be seen in the following industrial goups: banks (-2.23%), chemicals (-1.40%) and personal and household goods (-1.17%).

Economic data on tap

Spain´s consumer price index for the month of June has come in at a 1.9% year-on-year pace, as expected.

German unemployment rose by 7,000 in June (Consensus: 3,000).

The Eurozone´s business climate indicator for the month of June has come in at -0.94 (Consensus: -0.87), versus the previous month´s reading of -0.79.

Euro slips

The euro/dollar is now moving down by 0.32% to the 1.2430 mark.

Front month Brent crude futures are falling by 0.064 dollars to the 93.45 dollar per barrel mark on the ICE.

AB

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