The European session got under way after the main equity benchmark indices opened with an average gain of 0.70%, as markets shrugged off a report that says that Spain made a plea for bank aid.

This interpretation stems from statements made by the Spanish budget minister Cristobal Montoro yesterday. Spain’s risk premium opened at 505 basis points after reaching a high of 541 basis points last week.

Meanwhile, investors were anxiously awaiting the monthly interest rate meeting to be held this afternoon by the European Central Bank (ECB). Given the increased tension in the European debt crisis, the central bank is expected to apply more accommodative monetary measures such as a rate cut or new liquidity injection operations; analysts will keep a close eye on ECB president Mario Draghi when he speaks at the press conference.

European officials may have finally realised that the region is in a serious situation and have begun working towards a banking or financial union to complement the monetary union and fiscal pact.

In the foreign exchange market, the euro was waiting for the ECB’s verdict with a slightly bullish bias. The sterling pound recovered versus the US dollar and the euro. Carry trade currencies rose versus the greenback and the yen while Nordic currencies showed mixed performances versus the euro and the US dollar.

Coming up, there will be first quarter gross domestic product data in the Eurozone and industrial production data in Germany. In the United States, there will be non-agricultural productivity and labour unit costs for the first quarter and the Federal Reserve’s Beige Book.

FM