Weekly Markets

Perspectives

For important disclosures, refer to the Disclosure Section, located at the end of this report.

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At the ECB meeting’s press conference, Mario Draghi

seemed more hawkish. Now, the market believe that a

rate cut is less likely in the next few months. EURUSD

has rallied strongly on the news.

Meanwhile, Spain held last week its first bond

auction of 2013. The country raised €5.8bn vs. €5bn

targeted. The 10yr Spanish bond finished the week

below 5%. Given current market momentum,

investors seem to believe that Spain no longer will

need to trigger OMT in Q1 2013. The Spanish Treasury

said that it plans to issue a total of €215bn to €230bn

worth of bonds in 2013.

Last week was a positive one for the European

Banking sector. Sentiment in the sector was helped by

the headlines suggesting that the Basel Committe had

relaxed bank liquidity coverage rules and pushed out

the timetable for its implementation. Moreover, BES

and Banco Popular tapped the bond market. Both

issues suggest a progressive reopening of the

wholesale funding market for Iberian banks.

Weekly SummaryIn the US, American Express surprised the market

with an earlier that expected profit release. Alcoa

announced a relatively upbeat 2013 guidance.

In Japan, Mr. Abe announced a JPY10tr fiscal

stimulus package. According to the local press, the

BoJ and the government will establish cooperation

in order to set a 2% inflation target.

In Portugal, the domestic banking sector finished

the week with impressive gains. An IMF report

was released pointing to various areas of reform

for the Portuguese public sector and presented

several proposals for the government to cut €4bn

(2% of GDP) in public spending. Jerónimo Martins

released in-line Q4 2012 sales. Its stock price

surged 6.1%, its biggest daily gain in five months.

JP Morgan, Morgan Stanley, Goldman Sachs, Bank

of America, Citigroup, Intel and GE will release

results this week. In Europe, Carrefour will

announce Q4 2012 sales.

Industrial Production

-25

-20

-15

-10

-5

0

5

10

15

20

30

35

40

45

50

55

60

65

2005 2006 2007 2008 2009 2010 2011 2012 2013

German Industrial Production and

Manufacturing PMI

Manufacturing PMI (LHS) Industrial Production (y/y, %, RHS)

11.8

6

7

8

9

10

11

12

2008 2009 2010 2011 2012 2013

Euro-zone Unemployment rate (%)

Euro-zone: Unemployment rate

at a new record high• The euro area unemployment rate increased

0.1pp to a new all-time high in November 2012

at 11.8%;

• The number of unemployed in Germany is at its

low since October 1991. The unemployment

rate was unchanged at 5.4%;

• In Spain, the unemployment rate rose 0.4pp to

an all-time high at 26.6%. The youth

unemployment rate increased from 55.8% in

October to 56.5% in November.

German industrial production

rises in November• German industrial output increased 0.2% m/m,

after shrinking for three consecutive months,

significantly below consensus (1.0% m/m);

• The figures were depressed by a significant drop in

energy output. Industrial production in Germany’s

construction sector went up 1.0% m/m, but the

manufacturing component only rose 0.4% m/m.

Consumer durables slumped 2.2%, suggesting

weakness in the consumer activity.

Source: Eurostat Source: Bundesbank, Bloomberg

Banque de France business

climate rises in December 2012• In December 2012, the Banque de France

industrial sentiment indicator rose to 95 from

91 a month earlier. This index reached its

highest level since March 2012. It suggests that

the recovery in industrial activity might be

gathering pace;

• Activity in the service sector remained

unchanged at 91 in December 2012;

• The Banque de France expects Q4 2012 GDP to

contract by 0.1% q/q.

Spain: Exports continue to

perform well • November 2012 data on sales for large firms (2/3

of total Spanish firm sales) were released. Sales

were down 6.4% y/y, with the sharpest fall being

registered in the construction sector;

• Domestic sales continue to contract, while exports

by large firms are growing at a healthy pace;

• Nominal wages fell for the third consecutive

month (-0.1% y/y in November 2012);

• Domestic demand seems to continue experiencing

a contraction.

Source: Banque de France

Spain: Monthy sales by large firms (y/y, %)

Total Sales Domestic Sales Total Exports Total Imports

Jan-12 -3.9 -5.1 1.7 -0.7

Fev-12 -5.2 -6.0 -1.9 -10.2

Mar-12 -6.9 -8.1 -1.9 -13.0

Abr-12 -7.3 -9.0 0.3 -8.3

Mai-12 -5.9 -7.3 0.1 -13.5

Jun-12 -2.1 -2.7 0.8 -8.3

Jul-12 -6.5 -8.8 4.3 -3.1

Ago-12 -1.5 -2.3 2.0 -5.6

Set-12 -10.2 -11.8 -3.0 -10.6

Out-12 -7.7 -9.9 2.5 -4.5

Nov-12 -6.4 -8.5 2.6 -8.5

Source: Spanish Tax Agency

60

70

80

90

100

110

120

2008 2009 2010 2011 2012

Banque de France Business Sentiment

Industries Services

ECB: More upbeat than expected

• The ECB left its interest rates unchanged last

week, including the main refinancing rate at

0.75% and the deposit rate at 0.0%;

• According to Mario Draghi, no Council

members requested a rate cut at the meeting.

In December, some Governing Council

members had voted for a cut in interest rates;

• The ECB expects the economy to stay weak at

the beginning of 2013 with a gradual recovery

later in the year;

• President Draghi’s comments in the Q&A

session were more upbeat than what was

expected by the market. He listed a number of

positive developments, including the

stabilization of some leading indicators, the

improvement in financial market confidence, a

fall in current account imbalances, and a fall in

TARGET2 balances;

• The press statement asked for “further progress

in fiscal consolidation” and for “further

structural reforms…”.

Spain: Q3 2012 national accounts

were released• The savings rate for households reached 7.0% of

disposable income (9.1% in Q3 2011) and

disposable income fell by -2.1% y/y, reflecting

falling wages and higher taxes;

• In Q3 2012, the general government deficit/GDP

ratio excluding net capital transfers was -8.6%

(-8.7% in Q2 and -8.8% in Q1). The 2012 year-end

target is 6.3% of GDP;

• Non-financial corporations have seen 11.8%

growth in disposable income, suggesting that NFCs

are cutting costs rapidly.

Source: Bloomberg

-14

-12

-10

-8

-6

-4

-2

0

2

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Spain Monthly Current Account (€bn)

8

9

10

11

12

13

14

15

16

17

18

15

20

25

30

35

40

2008 2009 2010 2011 2012 2013

Portugal Unemployment Rate

Unemployment Rate for youths (under 25) (%, LHS)

Total Unemployment Rate (%, RHS)

Portugal: Unemployment rate

remained stable at 16.3%• In November, the unemployment rate in

Portugal remained stable at 16.3%;

• The unemployment rate for youths (under 25)

declined from 39.0% in October to 38.7% in

November;

• GDP contraction and ongoing fiscal

consolidation continue to weigh on labor

market conditions.

Portugal: Government is

expected to focus on expenditure

cuts• The legality of the 2013 Budget is being

challenged with several requests sent to the

Constitutional Court to judge whether they are

against the Constitution;

• In a comment to the Jan-Nov 2012 fiscal data, the

independent parliamentary fiscal watchdog said

that the 2012 government budget deficit target

(5% of GDP) would only be possible via one-off

measures. Tax revenues continue lagging behind

government estimates;

• An IMF report released last week suggested

various areas of reform for the Portuguese public

sector and presented several proposals for the

government to cut €4bn (2% of GDP) in public

spending. The report said that the wage bill and

pension spending would need to be reduced in

order to generate the government’s spending

reduction goals.Source: Eurostat

Portugal: Construction sector

remains depressed• The index of production in construction fell by

-19.3% y/y in the quarter ending in November

2012, down from -18.0% in October 2012.

Employment and wages in the sector registered

y/y change rates of -19.0% and -20.3% in

November, respectively;

• Exports and imports of goods decreased by

-0.1% y/y and -3.6% y/y, respectively, in the

quarter ended in November 2012. The deficit in

the trade balance fell by €511mn;

Portugal: Domestic demand

remains weak• The industrial new orders index fell by -5.0% y/y in

November 2012, following a reduction of -5.2% in

October 2012. The domestic index decreased by

-15.0% y/y (-16.3% y/y in October 2012), while

new orders from the external market rose 2.2%

y/y (3.0% y/y in the previous month);

• Portuguese banks’ NPL ratio rose from 9.97% to

10.2% in November 2012 (the highest level since

1997), in the corporate segment, while credit

granted to companies fell by -8% y/y. In the

household segment, the NPL ratio rose to 3.8%,

while credit granted fell by -4% y/y.

Source: Statistical Office of Portugal

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

2006 2007 2008 2009 2010 2011 2012 2013

Domestic Industrial New Orders (y/y)

Source: Statistical Office of Portugal

-250

-200

-150

-100

-50

0

50

100

150

200

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

US Monthly Treasury Federal Budget ($bn)

Sharp widening in US trade

deficit in November • The trade deficit increased to a seven-month

high of $48.7bn in November (above de

consensus forecast at $43.1bn), from $42.1bn

in the previous month;

• In real terms, the deficit jumped to a four-year

high of $51.9bn, from $46bn in October;

• Nominal exports rose by 1.0% m/m and non-oil

imports increased by 4.4% m/m;

• The bilateral deficit with China decreased

slightly in November, but it increased sharply

with the Euro-zone, particularly Germany.

US budget deficit narrows by

$86bn relative to year-ago levels• The NFIB index of small business optimism rose

to 88.0 from 87.5 in December, only a small

rebound after the decline from 93.1 in October,

probably reflecting concerns about the

economic outlook due to the “fiscal cliff”;

• The US federal budget deficit was $0.3bn in

December 2012, $86bn less than the December

2011 print. This brings the deficit to $292bn for

Q1 of FY2013, a 9.1% decrease relative to the

same period in FY2012, largely driven by higher

revenues.

Source: US Dept. of Commerce

-80

-70

-60

-50

-40

-30

-20

-10

0

2006 2007 2008 2009 2010 2011 2012 2013

Monthly International Trade Balance ($bn)

Nominal

Real

Source: US Treasury

Japan: Abe administration

announces a JPY10tr emergency

economic stimulus package• During the recent election, the LDP promised to

implement a first emergency economic stimulus

package right away and implement new

economic policies;

• Since taking office on December 26th, the Abe

administration has been aggressively moving

with fiscal and monetary policy initiatives with

the goal of winning a majority in the July 2013

upper house elections.

China: December money and

credit supply below expectations• CPI rose to 2.5% y/y (consensus: 2.3%), following

2.0% y/y in November, reflecting higher food

inflation;

• December money and credit supply was below

market expectations. New CNY loans were

Rmb454.3bn in December 2012 (consensus:

Rmb550bn);

• The December trade data was encouraging.

Exports up 14.1% y/y (consensus: 5.0%). Imports

rose 6.0% y/y (consensus: 3.5%)

Source: MoF

-1,000

-500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Japan Monthly Non-adjusted Current Account Balance

(JPYbn)

-4

-2

0

2

4

6

8

10

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

China CPI Inflation (%)

Source: NBS

• BPI (BPI PL), BCP (BCP PL) and BES (BES PL) were the main

winners last week in the PSI20 Portuguese stock benchmark

index. BES has announced it has issued €500mn 5-year bonds

with a 4.75% coupon at mid swap + 400bps. This is another

signal of progressive reopening of wholesale funding markets to

Portuguese banks. Moreover, Portuguese banks funding from

the ECB stood at €52.78bn at the end December 2012. This

represents a decline of €1.82bn from the €54.61bn registered in

the previous month;

• Mota-Engil (EGL PL), the Portuguese construction company, rose

more than 9% over last week. Mr. Jorge Coelho resigned as

Chairman of the Executive Committee and Vice Chairman of the

company. The new CEO, Mr. Gonçalo Martins (former CFO), gave

an interview to the local press saying that the company will

continue following the strategic plan already announced. The

group’s growth remains focused in Africa and Latam;

• Portugal Telecom (PTC PL)’s shares increased 8.9%. The Brazilian

Development Bank has approved a loan of BRL5.4bn to Oi to

support the company’s investment plans for the 2012-14 period.

The project includes investments in expanding and improving the

capacity of the broadband network, fixed and mobile, cable TV

infrastructure, and investments in information technology.

PSI20 weekly review

Source: Bloomberg

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2011 2012 2013

American Express (AXP US) Stock Price ($)

$61.24

• Ford (F US)’s stock price increased 3.2% over last week.

The automaker announced that it will double its

shareholder dividend. Ford raised its quarterly dividend to

$0.10 per share from $0.05 per share, which raises the

annual payout to $1.5bn from $762mn;

• American Express (AXP US) rose 2.73%. The company pre-

announced in-line Q4 2012 earnings and a restructuring

plan including a $400mn restructuring charge given

changing industry dynamics, a $342mn rewards related

liability adjustment and a $153mn charge for

reimbursements. Full earnings will be released after the

close on January 17th;

• Nokia (NOK1V FH) pre-announced positively on Thursday.

The company indicated that faster than expected cost cuts

allowed a material beat in Networks. Nokia expects 13-

15% operating margins vs. Consensus 8%. Devices showed

a narrower loss, driven by higher Asha volumes and lower

opex. Nokia sees Q4 operating margin of 0-2% vs.

Consensus -6%. Q4 2012 Devices & Services sales were

€3.9bn, vs. Consensus €3.8bn. Total devices volume

reached 86.3mn units vs. Consensus 89mn.

Last week’s market highlights

Source: Bloomberg

$14.00

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2010 2011 2012

Ford (F US) Share Price ($)

1.7

-6.2

-2.5

10.8

2.2

-8

-6

-4

-2

0

2

4

6

8

10

12

7-Jan 8-Jan 9-Jan 10-Jan 11-Jan

Nokia (NOK1V FH) Daily Stock Price Changes (%)

What we are watching this week:• Euro-zone industrial production for November is due

Monday and is expected to improve to -3.1% y/y

(from -3.6% in the previous month). German GDP

annual data for 2012 will be release on Tuesday;

• Final December inflation data for Germany, Italy and

Spain is due Tuesday and is likely to be unchanged

from its flash estimates. Final December inflation

data for the Euro-zone should be released

Wednesday. It is expected to remain unchanged

from its earlier estimate of 2.2% y/y;

• In the UK, the CPI, RPI, and PPI should be disclosed

Tuesday. December retail sales data is due Friday

and retail sales ex auto and fuel are expected to

increase by 2.0% y/y;

• In the US, retail sales ex autos and fuel (due

Tuesday) are expected to increase by 0.4% m/m,

following 0.7% m/m in the previous month. Housing

starts, housing permits and the housing market

index are expected to increase. The December CPI

will be released Wednesday. It should remain

unchanged (1.8% y/y) from the previous month.

Event Date Hour (GMT) Survey Prior

Public Holiday, Japan 14-Jan

Fed Chairman Bernanke speaks on US Economy in Atlanta 14-Jan 21:00

Industrial Production nsa y/y, Italy 14-Jan 09:00 -0.3%

Euro-Zone Ind. Prod. wda y/y, Euro-Zone 14-Jan 10:00 -3.1% -3.6%

Machine Tool Orders y/y, Japan 15-Jan 06:00 -21.3%

CPI y/y, Germany 15-Jan 07:00 2.1% 2.1%

GDP y/y NSA, Germany 15-Jan 08:00 0.8% 3.0%

Consumer Price Index y/y, Spain 15-Jan 08:00 2.9% 2.9%

CPI - EU Harmonized y/y, Italy 15-Jan 09:00 2.6% 2.6%

CPI y/y, UK 15-Jan 09:30 2.7% 2.7%

Euro-Zone Trade Balance, Euro-Zone 15-Jan 10:00 10.0B 10.2B

Retail Sales y/y, Brazil 15-Jan 11:00 8.10% 9.10%

Empire Manufacturing, US 15-Jan 13:30 0.0 -8.1

Advance Retail Sales, US 15-Jan 13:30 0.2% 0.3%

Retail Sales Ex Auto & Gas, US 15-Jan 13:30 0.4% 0.7%

Producer Price Index y/y, US 15-Jan 13:30 1.4% 1.5%

Business Inventories, US 15-Jan 15:00 0.3% 0.4%

EU27 New Car Registrations, Euro-Zone 16-Jan 07:00 -10.3%

Trade Balance (Total) (Euros), Italy 16-Jan 09:00 2660M 2452M

Euro-Zone CPI y/y, Euro-Zone 16-Jan 10:00 2.2% 2.2%

Consumer Price Index y/y, US 16-Jan 13:30 1.8% 1.8%

Industrial Production, US 16-Jan 14:15 0.3% 1.1%

Capacity Utilization, US 16-Jan 14:15 78.5% 78.4%

NAHB Housing Market Index, US 16-Jan 15:00 48.0 47.0

U.S. Federal Reserve Releases Beige Book 16-Jan 19:00

ECB Publishes Monthly Report, Euro-Zone 17-Jan 09:00

Housing Starts, US 17-Jan 13:30 890K 861K

Building Permits, US 17-Jan 13:30 905K 899K

Initial Jobless Claims, US 17-Jan 13:30 370K 371K

Philadelphia Fed., US 17-Jan 15:00 6.0 8.1

Real GDP y/y, China 18-Jan 02:00 7.8% 7.4%

Industrial Production y/y, China 18-Jan 02:00 10.2% 10.1%

Retail Sales y/y, China 18-Jan 02:00 15.0% 14.9%

Industrial Production y/y, Japan 18-Jan 04:30 -5.8%

Capacity Utilization m/m, Japan 18-Jan 04:30 1.6%

Industrial Orders n.s.a. y/y, Italy 18-Jan 09:00 -0.1%

Industrial Sales n.s.a. y/y, Italy 18-Jan 09:00 -4.7%

Retail Sales Ex Auto Fuel y/y, UK 18-Jan 09:30 2.0% 2.0%

U. of Michigan Confidence, US 18-Jan 14:55 75.0 72.9

Source: Bloomberg, Fincor

-0.4%

1.0%

0.6%

0.3%

-0.1%

0.1%

-0.3%

0.9%

-0.1%

0.8%

0.0%

0.5%

Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12

US Adjusted Retail Sales "Control Group" (m/m)

Next Week Preview: Economics

Source: US Census Bureau

• The provisional estimate for the headline of the

January’s University of Michigan Consumer Confidence

is expected to be released on Friday (14:55 GMT). The

last minute “fiscal cliff” deal could have had an impact

on sentiment. Moreover, gas prices have decreased

and equity prices rose. Nevertheless, the expiration of

the payroll tax cut is going to hit all working individuals

and could penalize consumer confidence;

• The Empire State Index is due Tuesday (13:30 GMT),

while the Philly Fed Index should be released Thursday

(15:00 GMT). Both survey could reflect the deal to

avert the “fiscal cliff”. However, business confidence in

early January will probably also take into account that

the debt ceiling stand-off is continuing;

• US Retail Sales will be announced on Tuesday (13:30

GMT). The ICSC chain stores sales suggest that

spending rose in December;

• The focus for the weak in the Euro-zone could be the

release of German GDP annual data for 2012.

Consensus expect it to print at 0.8% y/y, down from

3.0% in 2011.

Source: Conference Board; U. of Michigan Survey Research Center

50

60

70

80

90

100

20

40

60

80

100

120

2007 2008 2009 2010 2011 2012

US Consumer Confidence Indices

Conference Board (RHS) University of Michigan (LHS)

-5.1%

3.7%3.0%

-6%

-4%

-2%

0%

2%

4%

6%

1991 1995 1999 2003 2007 2011

Germany: Annual Real GDP Growth

Source: German Federal Statistical Office

• The company reported Q4 2012 sales in line

with consensus. Polish LfL sales grew 6.4%. The

group opened 120 Biendronka stores in Q4

taking the total to 2125;

• The Portuguese earnings season will continue

with Galp’s trading update on January 21st.

Next Week Preview: Earnings season in Portugal and Government

Debt Issuance Calendar Jerónimo Martins announced Q4

2012 Trading Statement• Portugal will redeem €1.3bn of BT on Friday.

France and Spain will be the

highlights of the week

Source: Bloomberg, Companies information

Company Event Date

Galp Trading Update 21-Jan

Sonae Trading Update 23-Jan

Portucel FY12 Results 29-Jan

BPI FY12 Results 30-Jan

BES FY12 Results 5-Fev

Semapa FY12 Results 7-Fev

BCP FY12 Results 8-Fev After-Market

Galp FY12 Results 11-Fev Before-Market

Jerónimo Martins FY12 Results 27-Fev

Zon FY12 Results 27-Fev

Sonae Indústria FY12 Results 27-Fev

EDP Renováveis FY12 Results 28-Fev

Sonaecom FY12 Results 7-Mar

REN FY12 Results 7-Mar

Altri FY12 Results 8-Mar

Cofina FY12 Results 8-Mar

Sonae FY12 Results 13-Mar After-Market

Mota Engil FY12 Results 14-Mar

EDP FY12 Results 15-Mar After-Market

ESFG FY12 Results 15-Mar

Portugal Telecom FY12 Results 28-Mar

Banif FY12 Results n.a.

Next week's Selected Bonds and T-Bills Supply

Issue Country Date Amount Hour (GMT)

BTF Apr 2013 France 14-Jan €3.2-3.6bn

BTF Jun 2013 France 14-Jan €1.2-1.6bn

BTF Jan 2014 France 14-Jan €1.6-2bn

T-Bills Apr 2013 US 14-Jan $32bn

T-Bills Jul 2013 (new) US 14-Jan $28bn

Letras Jan 2014 Spain 15-Jan

Letras Jun 2014 Spain 15-Jan

T-Bills Feb 2013 US 15-Jan

Bund 15 Feb 2023 (new) Germany 16-Jan €5bn 10:30

Bonos 3.75% 31 Oct 2015 Spain 17-Jan 09:30

Bonos 4.50% 31 Jan 2018 Spain 17-Jan 09:30

Obligaciones 4.70% 30 Jul 2041 Spain 17-Jan 09:30

BTAN 2.50% 15 Jan 2015 France 17-Jan 09:50

OAT 3.75%25 Apr 2017 France 17-Jan €7-8bn 09:50

OAT 1.00% 25 May 2018 (new) France 17-Jan 09:50

OATei 0.25% 25 Jul 2018 France 17-Jan 10:50

OATi 1.30% 25 Jul 2019 France 17-Jan €1.3-1.7bn 10:50

OATei 1.85% 25 Jul 2027 France 17-Jan 10:50

Next week's Selected Bonds and T-Bills redemptions

Issues Country Date Amount Hour (GMT)

BTAN 3.75% France 12-Jan €17.7bn

BOT (3m) Italy 14-Jan €3bn

BOT (12m) Italy 14-Jan €8.5bn

BTF France 17-Jan €8bn

Letras Spain 18-Jan €5.6bn

BT Portugal 18-Jan €1.3bn

Source: Fincor

Next Week Preview: European and US Corporate CalendarCarrefour is expected to release

Q4 2012 sales on Thursday• Carrefour’s LfL sales growth (ex-fuel and calendar)

is expected to be negative for hypermarkets in

France. Will the Detroit Auto Show (January, 15th-

16th) be a catalyst for the european sector?

US: The Financial sector will

probably be the highlight • JPMorgan, Morgan Stanley, Goldman Sachs,

Bank of America and Citigroup will release

results this week;

• Intel and GE will also be closely followed by

investors.Country Company Event Time (GMT) Ticker (Bloomberg)

Monday, 14 January

UK Taylor Wimpey PLC Q4 2012 Trading Update 07:00 TW/ LN

Tuesday, 15 January

Switzerland Geberit AG Q4 2012 Trading Update 06:00 GEBN VX

UK Burberry Group PLC Q3 2013 Trading Update 07:00 BRBY LN

UK Ashmore Group PLC Q2 2013 Trading Update 12:00 ASHM LN

Austria Telecom Austria Capital Markets Day TKA AV

France Casino Guichard Perrachon SA Q4 2012 Trading Update 17:15 CO FP

Switzerland Lindt & Sprungli FY Trading Statement LISN SW

UK Michael Page International Q4 Trading Statement MPI LN

Sweden Hennes & Mauritz AB December 2012 Trading Update HMB SS

UK Rio Tinto PLC Q4 2012 Trading Update RIO LN

France Aeroports de Paris December 2012 Trading Update ADP FP

Germany Fraport AG December 2012 Trading Update FRA GR

Wednesday, 16 January

UK Experian PLC Q3 2013 Trading Update 07:00 EXPN LN

Germany Metro AG Q4 2012 Trading Update 07:00 MEO GR

Denmark Chr Hansen Holding A/S Q1 2013 Earnings Release 07:00 CHR DC

UK Barratt Developments PLC Q2 2013 Trading Update 08:00 BDEV LN

Thursday, 17 January

Netherlands Koninklijke Ahold NV Q4 2012 Trading Update 05:45 AH NA

France EADS 2012 year-end Airbus press conference EAD FP

Belgium Delhaize Group SA Q4 2012 Trading Update 06:00 DELB BB

Netherlands ASML Holding NV Y2012 Earnings Release 06:00 ASML NA

Switzerland SGS FY Results SGSN VX

France Carrefour SA Q4 2012 Trading Update 06:30 CA FP

UK African Barrick Gold PLC Q4 2012 Trading Update 07:00 ABG LN

UK Mothercare Q3 Sales MTC LN

UK Aberdeen Asset Management PLC Q1 2013 Trading Update 08:00 ADN LN

France Remy Cointreau SA Q3 2013 Trading Update 08:30 RCO FP

France Accor SA Q4 2012 Trading Update 16:45 AC FP

UK Booker Group PLC Q3 2013 Trading Update BOK LN

UK Premier Oil PLC Q4 2012 Trading Update PMO LN

UK Associated British Foods PLC Q1 2013 Trading Update ABF LN

Source: Bloomberg

Company Event Time (GMT) Ticker (Bloomberg)

Monday, 14 January

PPG Industries Inc Q4 2012 Earnings Release PPG US

Tuesday, 15 January

Lennar Corp Q4 2012 Earnings Release Before Market Opening LEN US

Forest Laboratories Inc Q3 2013 Earnings Release Before Market Opening FRX US

Linear Technology Corp Q2 2013 Earnings Release LLTC US

Wednesday, 16 January

Charles Schwab Corp/The Q4 2012 Earnings Release Before Market Opening SCHW US

US Bancorp Q4 2012 Earnings Release Before Market Opening USB US

Bank of New York Mellon Corp/The Q4 2012 Earnings Release 11:30 BK US

JPMorgan Chase & Co Q4 2012 Earnings Release 12:00 JPM US

Goldman Sachs Group Inc/The Q4 2012 Earnings Release 12:30 GS US

eBay Inc Q4 2012 Earnings Release After Market Close EBAY US

Thursday, 17 January

BlackRock Inc Q4 2012 Earnings Release Before Market Opening BLK US

UnitedHealth Group Inc Q4 2012 Earnings Release Before Market Opening UNH US

Fifth Third Bancorp Q4 2012 Earnings Release 11:30 FITB US

Bank of America Corp Q4 2012 Earnings Release 12:00 BAC US

Citigroup Inc Q4 2012 Earnings Release 13:00 C US

Capital One Financial Corp Q4 2012 Earnings Release 21:05 COF US

Intel Corp Q4 2012 Earnings Release After Market Close INTC US

Friday, 18 January

General Electric Co Q4 2012 Earnings Release Before Market Opening GE US

Johnson Controls Inc Q1 2013 Earnings Release 12:00 JCI US

Morgan Stanley Q4 2012 Earnings Release 12:15 MS US

Schlumberger Ltd Q4 2012 Earnings Release SLB US

Consolidated Edison Inc Q4 2012 Earnings Release ED US

State Street Corp Q4 2012 Earnings Release STT US

Source: Bloomberg

50

60

70

80

90

100

110

120

Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13

Acerinox vs. IBEX35 Index

Acerinox IBEX35 Index

1 Jan 2012 = 100

Next Week Preview: Lower Saxony Elections and Idea of the weekLower Saxony to hold elections

on January 20th

• The week will end with the state parliamentary

election in Lower Saxony, Germany’s fourth biggest

federal state, on Sunday, January 20th;

• It should be the last German state to go to the

polls ahead of the General Election at the end of

September;

• The state is governed by a CDU/FDP coalition since

2008, a replica of the current coalition at national

level;

• Chancellor Angela Merkel’s position at the national

level is still very strong, in contrast to her SPD rival.

Idea of the Week: Acerinox• The acquisition of ThyssenKrupp’s stainless steel

unit by Outokumpu shows that the

consolidation in the European sector is moving

forward;

• Acerinox (ACX SM) continues trying to reduce its

gearing;

• Capacity expansion in Malaysia will allow the

company to target new customers in the region;

• H2 2012 showed weaker than expected

conditions in both the US and European

Markets. A moderate restocking could support

the stock in Q1 2013.

Source: Infratest dimap Source: Bloomberg

20

40

60

80

100

120

140

2010 2011 2012

BES and Banco Popular Relative Performance

BES

Banco Popular

1 Jan 2010 = 100

Source: Bloomberg

Charts we are watching

• The ECB statement was more hawkish that expected.

Now, the market seems to believe that, unless there’s a

significant fall in sentiment, the ECB is unlikely to cut the

refi rate in the near-term. Moreover, 10-year sovereign

bond yields on the Euro periphery continue to fall. Both

factors have supported the Euro/USD exchange rate that

reached 1.3343 at the end of last week. But, with the

euro area economy expected to remain weak at the

beginning of 2013, a higher Euro/USD will not provide

much help to the gradual recovery that is expected later

in the year.

• Last week, BES has announced that it issued €500mn 5-

year bonds with a 4.75% coupon at mid swap +400bps.

Moreover, the bank is planning to issue further bonds

this year in order to reduce its reliance on ECB funding.

Banco Popular announced that it has issued €750mn 2.5-

year bonds with a 4.125% coupon at mid swap +362bps.

Both issues suggest the progressive reopening of

wholesale funding markets for Portuguese and Spanish

banks with a clear positive impact on both stock prices.Source: Bloomberg

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