Europe Factors to Watch-Shares set to dip on U.S. debt impasse

Mon Oct 14, 2013 2:29am EDT

PARIS, Oct 14 (Reuters) - European stocks are set to dip on Monday as the
United States edged closer to a debt default after Democrats and Republicans
failed to reach an agreement over the weekend.
    Friday's optimism that a deal could be reached over the weekend disappeared
on Saturday, although Senate Majority Leader Harry Reid and Republican leader
Mitch McConnell held talks that Reid later called "substantive". 
    Global stocks strongly rallied late last week, boosted by hopes a deal to
raise the U.S. federal borrowing limit before the Oct. 17 deadline was near.
    At 0625 GMT, futures for Euro STOXX 50, for UK's FTSE 100,
for Germany's DAX and for France's CAC were down 0.3-0.4
percent, while German Bund futures open 2 ticks lower at 139.77.
    "Against the backdrop of Thursday and Friday's gains, it's only a modest
re-tracement and there is still the overwhelming belief that a deal will be
reached by default day," Capital Spreads trader Jonathan Sudaria wrote in a
note.
    Also rattling investors on Monday, data showed China's export growth fizzled
in September to post a surprise fall, while inflation hit a seven-month high,
limiting the scope for the country's central bank to manoeuvre to support the
economy.  
    Spanish banks will be in focus after sources said the lenders are
considering ways to boost their capital amid fears the euro zone's imminent
review of their balance sheets will force them to set aside even more cash for
potential losses on restructured loans. 
    The auto sector will also be in the spotlight after sources told Reuters PSA
Peugeot Citroen is preparing a 3 billion euro capital increase in
which Chinese partner Dongfeng and the French government would take matching
stakes. 
    Japanese markets were closed for a national holiday.
    
--------------------------------------------------------------------------------
  MARKET SNAPSHOT AT 0624 GMT: 
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,703.20   0.63 %    10.64
 MSCI ASIA EX-JP                       550.87   -0.2 %    -1.13
 EUR/USD                               1.3564   0.17 %   0.0023
 USD/JPY                                98.24  -0.32 %  -0.3200
 10-YR US TSY YLD                       2.691       --     0.00
 10-YR BUND YLD                         1.852       --    -0.01
 SPOT GOLD                          $1,273.30   0.05 %    $0.68
 US CRUDE                             $101.93  -0.09 %    -0.09
 
  > GLOBAL MARKETS-Asian shares fall as U.S. debt deadline nears 
  > Wall St ends up on hopes of debt solution in Washington 
  > FOREX-Dollar slips vs yen as U.S. debt deal remains elusive 
  > PRECIOUS-Gold near 3-month low as U.S. debt deadline looms 
  > METALS-London copper drifts on lack of progress in U.S. debt talks 
  > Brent drifts towards $111 on lower Chinese exports, US budget crisis 
    
    COMPANY NEWS:
    
    PEUGEOT 
    The automaker is preparing a 3-billion-euro ($4.1-billion) capital increase
in which Chinese partner Dongfeng and the French government would take matching
stakes in the carmaker, people with knowledge of the matter said Friday.
 
    
    DASSAULT SYSTEMES 
    The French software maker warned its third-quarter revenue and earnings
would be lower than it had expected, citing sluggish orders.
    
    SPANISH BANKS
    Spanish banks are considering ways to boost their capital amid fears the
euro zone's imminent review of their balance sheets will force them to set aside
even more cash for potential losses on restructured loans, banking sources in
Madrid said. 
    
    ITALIAN BANKS
    Italy's new budget proposes to give banks and insurance companies more
speedy tax breaks on loan losses and writedowns in a move that will help lenders
to clean up their balance sheets. 
    
    UNICREDIT 
    Italy's biggest lender by assets may consider listing a minority stake in
its German unit, HVB, should upcoming stress tests require Italy's largest bank
by assets to raise more capital, magazine Der Spiegel reported, without citing
sources.
        
    ALLIANZ 
    The insurer might increase its investments in real estate, private-equity
funds and wind parks to 80 billion euros ($109 billion) from 55 billion euros,
Chief Financial Officer Maximilian Zimmerer told German paper Welt am
Sonntag. 
    
    BMW 
    German luxury car maker BMW said it is set to sell another record number of
cars in China this year, an upbeat outlook accompanied by a separate
announcement that it would recall over 25,000 defective cars in the nation in
2014. 
    
    ALITALIA AIR FRANCE-KLM 
    Shareholders of Alitalia will vote on Monday on a 300 million euro capital
increase to keep the near-bankrupt Italian airline flying, but the participation
of top investor Air France-KLM is far from certain. 
    
    CAMFIN, PIRELLI 
    The takeover bid launched by Lauro 61, a vehicle created by a group of
investors led by Pirelli's Chairman Marco Tronchetti Provera, over Pirelli
holding Camfin, won nearly 96 percent of acceptances, the vehicle said on
Friday. 
    
    BANCA POPOLARE EMILIA ROMAGNA 
    Italian cooperative bank Banca Popolare dell'Emilia Romagna (BPER) expects
growth in problem loans to slow and writedowns to drop in the second half of
2013, its chief executive Luigi Odorici said on Friday. 
    
    EDF 
    Britain is "extremely close" to sealing a deal with EDF Energy to build the
country's first new nuclear power station since 1995, Energy Minister Ed Davey
said on Sunday, adding there was also Chinese involvement in the talks. 
    
    SANOFI 
    The FDA has approved over-the-counter Nasacort allergy spray to treat hay
fever and nasal allergies.
Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.