Euro Zone M3 Growth Improves, Spanish Retail Sales Fall

Arthi Gupta
28 Nov, 2012
New York City

The European Commission approved restructuring plans of four Spanish banks. Italy raised

[R]1:40 PM Frankfurt – The European Commission approved restructuring plans of four Spanish banks. Italy raised €7.5 billion in bond sale at lower yields. Euro zone broad monetary aggregate M3 rose and Spanish retail sales fell in October.[/R]

Market sentiment in European trading was cautious after investors shifted focus to the budget negotiations in the U.S. and awaited German inflation data.

Lenders and ministers in the euro zone settled their differences to lower debt and offer interest free loans to Greece after a meeting that lasted 12 hours. The political will to support Greece at all cost and preserve euro helped the currency to reach to a new high in the year.

The European indexes declined ahead of German inflation data and fiscal cliff worries. Italy raised €7.5 billion in bond sale at lower yields.

The European Commission approved the restructuring plans of the four Spanish banks BFA/Bankia, NCG Banco, Catalunya Banc and Banco de Valencia and said it is in line with EU state aid rules.

All banks committed to divest a number of industrial equity stakes and subsidiaries, the proceeds of which will contribute to finance the restructuring and thus limit the need for further aid.

European Central Bank Governing Council Member Ewald Nowotny said in an interview with Austrian radio station OE1 that the deal struck by euro zone finance ministers and the IMF “is probably a solution that is better than all alternatives.""

In Paris trading, the CAC-40 Index fell 10.78 or 0.3% to 3,491.17 and in Frankfurt the DAX Index edged lower 12.31 or 0.2% to 7,319.77.

The yields on Spain’s benchmark fell nine basis points to 5.44%. Italian 10-year yields declined 6 basis points to 4.67%.

Italian Bond Auction

Italy sold €7.5 billion of six-month Treasury bills at an average yield of 0.919% compared to an average yield of 1.347% at the last auction on October 29. The bid-to-cover ratio rose to 1.65 from 1.52 last month.

Euro Zone M3 Growth Improves

The annual growth rate of the broad monetary aggregate M3 in the euro area increased to 3.9% in October from 2.6% in September, the European Central Bank said.

The three-month average of the annual growth rates of M3 in the period from August to October rose to 3.1% compared with 3% in the period from July to September.

Spanish Retail Sales Fall

Spain''s retail sales fell 9.7% annually in October, following an 11% drop in September, the statistics office INE said today.

Food sales declined 3.1% and non-food sales slumped 11.6% in October.

Hungarian Jobless Rate Rises

The jobless rate in Hungary rose to 10.5% in the August-October period from 10.4% in July-September, data from the Hungarian Central Statistics Office showed.

The number of unemployed people was 463,000 in the August-October period, 1.1% less than a year-ago period.

The unemployment rate for the 15-24 age group was 30.1%, 3.1 percentage points higher than a year ago.

Swedish Current Account Surplus Up

Sweden''s current account surplus increased to SEK 66.1 billion in the third quarter from SEK 61.5 billion in the second quarter, Statistics Sweden reported today. The surplus declined from SEK 72 billion in the quarter a year ago.

The surplus on trade in goods fell to SEK 17.3 billion in the third quarter from SEK 24.4 billion in the second quarter and that in services decreased to SEK 35.6 billion in the third quarter from SEK 38.7 billion in the second quarter.