Europe midday: Unlikely Spain will ask for a bail-out this year, Fitch says



LONDON (ShareCast) - - Fitch: Unlikely Spain will ask for a rescue in 2013
- Slight falls in most benchmarks
- German GDP contracted towards end of year
- Spanish long-term bond yields reverse course and fall

FTSE 100 (FTSE: ^FTSE - news) : 0.03%
Dax (Xetra: ^GDAXI - news) -30: -0.49%
Cac-40: -0.21%
FTSE Mibtel 30: 0.05%
Ibex 35: -1.05%
Stoxx 600: -0.07%

The main European equity benchmarks were trading slightly lower by midday for the most part.

This following a warning by ratings agency Fitch that a delay in increasing the US federal debt limit could put the country's triple A rating at risk. As well, Fitch has indicated that it does not expect Spain to petition the European Stability Mechanism (ESM) for a rescue this year.

That last observation seems to have been what weighed on Spanish bonds in the early going, despite what looked to have been a fairly successful auction of €5.7bn of bills.

Of interest as well, Bank of England Governor Sir Mervyn King was cited as insisting that a banking union is not the solution to the Eurozone's problems.
All of the above came after slight losses last night on Wall Street and the reappearance of tensions on Capitol Hill over the federal government debt limit and the need for fiscal consolidation.

Of interest, however, yesterday evening ratings agency Standard&Poor's (S&P) raised its outlook on the sovereign debt ratings for Finland and Luxembourg.

SAP (NYSE: SAP - news) misses forecasts

German software giant SAP unveiled lower than forecast fourth quarter operating profits.

French utility EdF (Paris: FR0010242511 - news) will announce cost cuts of €1bn by 2015 when it releases its full-year results next month, French daily Le Figaro said.

Daimler (Xetra: 710000 - news) is not aware of China Investment Corp's (CIC) plans to take a stake in the company and is not in talks with CIC, Chief Executive Dieter Zetsche told reporters at the Detroit auto show on Monday, Reuters reports.

From a sector stand-point the best performance is now to be seen in the following: Personal&Household goods (0.68%), Media (0.60%) and Retail (0.53%).

Weaker than expected German GDP
Germany's gross domestic product (GDP) grew at an 0.7% year-on-year pace in 2012, below the 0.8% pace expected and the previous year's rate of 3%.

Economic activity contracted at a 0.5% pace in the last three months of 2012 the country's Statistics Office added.

Italian consumer prices increased at a 2.3% year-on-year clip in December, versus a rise of 2.4% in November (Xetra: A0Z24E - news) .

The Eurozone trade surplus for the month of November rose to €11bn, after a reading of €7.4bn for the previous month (Consensus: €8bn).

The Netherlands' trade surplus rose to €4.3bn in November, after a reading of €3.6bn for the month before.

Single currency nudges higher
The euro/dollar is now falling by 0.45% to the 1.3318 dollar mark. Deutsche Bank (Xetra: 514000 - news) expects the single currency to reach 1.40 in its cross versus the US unit this year.

Front month Brent crude futures are down slightly, by 0,116 dollars, to the 112.17 dollar mark on the ICE.