Europe open: Spain's risk premium backs off slightly

Date: Tuesday 29 May 2012

-Italian and French bill auctions on tap
-Spanish risk premium hit 514 basis points this morning
-Banks deposited 741.9bn euros ate ECB overnight
-Spanish retail sales dropped 11% in April

FTSE-100: 0.87%
Dax-30: 1.29%
Cac-40: 1.15%
Stoxx 600: 0.91%
Ibex 35: 0.21%

The main European equity benchmarks are now registering large gains despite a renewed push higher earlier on in the Spanish ‘risk premium’, which seems to have set off some 'alarm bells', although it has since fallen back.

Acting as a backdrop, investors are taking their cue from the rise to be seen in US equity futures this morning, on the back of somewhat less pessimism as regards the Greek crisis.

The above ahead of macro-economic data expected out this afternoon, Stateside, and Treasury auctions in France and Italy. In the former there is actually expected to be negative net supply which may support demand following yesterday’s lacklustre sale.

Lastly, the Hellenic Financial Stability Fund has disbursed €18bn in rescue-funds to the country’s four largest banks.

Spains 'risk premium' started the day higher at 514 basis points, following the 511 level reached yesterday, but has since fallen back towards 506.

From a sector stand-point the best performers on the DJ Stoxx 600 now are: basic resources (2.18%), automobiles (1.65%) and chemicals (1.61%).

Spanish retail sales registered record drop in April

Euro holding steady, but under 1.26

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