Europe midday: Markets rebound as investors await US election results

RELATED QUOTES

SymbolPriceChange
CB4.F6.7450.000
^GDAXI9,409.71+91.89
TUES13.28-0.13

LONDON (ShareCast) - FTSE-100: +0.62%
Dax (Xetra: ^GDAXI - news) -30: +0.56%
Cac (Frankfurt: 924169 - news) -40: 0.48%
FTSE Mibtel 30: +0.55%
Ibex 35 (Madrid: IBEX.MC - news) : +0.14%
Stoxx 600: +0.52%

European equities manage to rebound after yesterday's 1% drop as markets take a "wait and see" approach to the day's session.

Headlines are filled with the US elections that get in full-swing tonight and bets are equal on which candidate will walk away with the presidency. The latest poll posted in The Wall Street Journal shows Barack Obama with a slight lead over Republican rival Mitt Romney of 48.8% to 48.1%.

It's clearly anyone's race and European markets "should" awake tomorrow with the results in hand. However, The New York Times' warning is well worth noting: "should there be delayed counts, recounts and court challenges, Election Day becomes Election Week or — gasp! — Month."

Speaking of waiting, events in Athens are at a standstill as Greeks have begun a two-day strike to protest reforms. The Hellenic Parliament is expected to vote on the austerity package tomorrow and then the 2013 budget on Sunday. Yesterday afternoon reports indicated that nothing would go through in time for the meeting of Eurozone finance ministers on Monday.

Meanwhile, Spain, the other major player in the current chapter of the European debt crisis, has also decided not to give any new information for the markets to digest. At the same time that reports indicate that the European Commission will be officially announcing tomorrow much direr forecasts for the peripheral country, Prime Minister Mariano Rajoy seems content to stand pat. In an interview this morning, he simply repeated that deficit reduction was Spain's first priority and his government has yet to make a decision about requesting a bailout.

Eurozone services sector continues to contract

The latest data on the Eurozone's service sector released on Tuesday morning (NasdaqGS: TUES - news) shows that the European economic slowdown continues its course.

The Eurozone's Purchasing Managers' Index (PMI) for the services sector, compiled by Markit Economics fell to 46.0 points in October from 46.2 points, remaining below the 50-point threshold that indicates recession.

It's also worth mentioning that region's heavyweights Germany and France showed deterioration while peripheral countries such as Spain and Italy managed a slight improvement.

Other markets

The euro/dollar managed a slight rebound (+0.08% to the 1.2808) after recent losses.

Front month Brent crude futures currently trade up by 0,80% to $108.59.

JM