- Draghi (ECB) expects economy to recover in second half
- Spanish 10 year bond yields up 15 basis points to 5.17 per cent
- ECB to announce LTRO payback at 11:00
FTSE Mibtel 30: 0.50%
Ibex 35: 0.20%
Stoxx 600: 0.21%
The major European equity market averages are now trading slightly in the blue, with the exception of the German Dax, which is now registering large gains.
The above comes on the back of an equally large – although not entirely unexpected – rise in the IFO institute’s business climate index for the month of January.
Worth noting, the expected results for the European Central Bank’s LTRO early repayment will be released at around 11:00. Banks can reimburse all or part of the funds borrowed on a weekly basis. Economists at Unicredit expect EUR200bn to be repaid in the coming months. Until recently, some in the markets had feared that short term interest rates would rise as those loans were repaid. That is no longer the case.
Today, the Spanish Cabinet is expected to approve a law aimed at reducing the fragmentation of the country’s internal market. It should also approve an extension of current support measures to unemployed.
A survey among CEOs of Germany’s largest firms, held in Davos, shows a return of confidence in the cohesion of the euro area and cautious optimism about the economic outlook in Germany.
The EU-ECB-IMF troika has suggested a line of ‘comfort funding’ could be available to the Irish Government to ensure there is no disruption to the public finances at the end of the bailout, according to that country’s press.
European Central Bank President Mario Draghi is slated to speak at 09:30, at the World Economic Forum, in Davos.
Back on the equity front, and from a sector stand-point, the best performing industrial groups are: Chemicals (1.18%), Automobiles (0.71%) and Banks (0.60%).
Better than expected IFO reading
The German IFO Institute’s business climate index for the month of January has risen to 104.2 points, after a reading of 102.4 for the previous month and a consensus view of 103.0.
Other asset classes trading mixed
The euro/dollar is now higher by 0.16% to the 1.330 dollar mark.
Front month Brent crude futures are now lower by 0.044 dollars to the 113.22 dollar mark on the ICE.