by Jeremy Spain

Global equity markets had a subdued session on Monday, despite the Dow and S&P managing to chisel out very mild gains, most indices closed in negative territory. Weighing on sentiment were fears the Chinese government would ramp up its monetary tightening efforts and Moody's report on sovereign debt levels.

Some investors returned to the equity market late on after moderately better-than-expected US industrial production figures and unveiling of Senator Chris Dodd's new regulatory overhaul plan for Wall Street, which did not include some of the most restrictive measures that some traders had factored into share prices over recent weeks. CDS spreads on both sides of the Atlantic saw some widening, failing to react to the late rally in the equity markets, in Europe the benchmark iTraxx Xover index closed around 8 bps wider at the 423 bps level.

As for this morning, equity markets in China's are in positive territory which has helped sentiment somewhat, European stocks look set to trade up early on, although the Xover index is currently trading around unchanged as traders remain cautious ahead of the results of the Fed meeting tonight and the Bank of Japan's policy meeting which also starts later today.

Elsewhere, 10 year government bond spreads for Greece over bunds are currently around 2 bps tighter at the 288 bps level, after the eurozone governments declared last night that they stood ready to help the country tackle its debt crisis, although stopped short of promising any specific loan amounts, saying that any help would likely be based on bilateral loans.

CORPORATE HEADLINES

FINANCIALS
-- RBS is restructuring its balance sheet to boost its capital strength and its standing with bond investors. This could involve at least Stg10bln of its S28 bln debt bought back at a premium to current prices-FT.

AUTO
-- Renault has been unable to resolve differences in valuation with Daimler on a share swap that would have brought Daimler into the Renault-Nissan alliance.-Bbg -- Daimler and Reanult are in discussions to acquire mutual equity stakes as part of a possible allaince that would go beyond their current talks on small cars - FT. -- Close Brothers has reported a first-half operating profit before tax of Stg62.3 mln versus Stg41.5 mln last year.

TMT
-- Infineon Technologies may add more jobs at its Dresden plant to meet rising demand. -- U.S. computer maker Dell Inc. has filed a lawsuit against five Japanese and Taiwan technology companies over allegations of plotting to set prices and overcharging for the products they make.-WSJ

CONSUMER
-- Debenhams has released a first half trading report, saying that like-for-like sales increased by 0.3% over last year.

INDUSTRIALS
-- Airbus and Boeing have long split the market for big passenger jets, but smaller rivals such as Bombardier and Embraer could start to erode that dominance.-WSJ

BASIC MATERIALS
-- Rio Tinto and Aluminum Corp. of China are in advanced talks to jointly develop the Simandou iron-ore project in the West African nation of Guinea.-WSJ -- Rio Tinto has said that its capital spending may be between $5-6 billion in 2010. -- In a confrontation that has drawn comparisons with "Avatar," a local tribe stands in the way of Vedanta's efforts to mine bauxite buried in the eastern Indian state of Orissa.-WSJ -- Xstrata has had the outlook on its Baa2 senior debt ratings revised to "stable" from "negative" by Moody's.

OTHER
-- Euro-zone finance ministers Monday took steps toward drawing up plans for a possible Greek bailout, but they stopped short of agreeing to make one available, insisting they see no need for troubled Greece to receive any assistance.-WSJ -- Lending to the commercial property sector has thawed over the past year, with more banks providing additional debt for investment and development for the first time since the crash in 2007, according to a report from Savills - FT. -- Alistar Darling and the Labour government have failed to announce a "sufficiently ambitious" plan to cut the budget deficit, the European Commission is poised to conclude tomorrow - FT. -- Ernst & Young is to face questioning from the UK's audit watchdog over how it accounted for some of the transactions carried out by Lehman Brothers to boost the presentation of its balance sheet in London - FT.

EURO SUPPLY PIPELINE: Mar. 16

FINANCIALS

• Banco Popolare Espanol - Has hired RBS and UBS to run a covered bond program on its behalf, according to sources.
• VEB - Is to issue an inaugural deal in Euros. Leads are Barclays, Citigroup, HSBC and SocGen.
• LF Hypotek - Is to issue a benchmark, covered deal in Euros. Leads are Credit Suisse, Danske Bank, Deutsche Bank and RBS.
• NIBC Bank - Is to issue a benchmark, covered deal in Euros. The deal will be launched following investor presentations and the leads are Credit Agricole, Credit Suisse and NIBC.
• Aareal Bank - Is to issue a benchmark, 4 year deal in Euros. Leads are Bayerische Landesbank, Commerzbank, Deutsche Bank and DZ Bank.

CORPORATES

• Go-Ahead Group - Stg deal, currently roadshowing. Leads will be RBS and Barclays.
• Abengoa - Is rumoured to be considering issuing a deal in Euros, at some time in the near future. Leads are mooted to be BNPP, Deutsche Bank, Calyon, Credit Suisse, Banco Santander and SocGen.
• Vestas - Has hired Nordea, Rabobank, SocGen and UniCredit to arrange a European roadshow starting this week.
• Italcementi - Is to issue a benchmark deal in Euros. The deal will launched following investor presentations and the leads are Banca IMI, BoA-ML, BNPP and SocGen.
• Vale SA - Has announced this morning that it plans to offer Euro-denominated notes in the global capital markets. The company will use the net proceeds of this offering for general corporate purposes.

OTHERS

• Madrid - is to issue a benchmark, 10 year fixed rate deal in Euros. Price talk is in the mid-market swaps plus 130 bps area and the leads are Caja Madrid, HSBC and Credit Agricole.
• The state of North Rhine-Westphalia - Is to issue a E250 million, 5 year FRN deal. Price talk is in the Euribor plus 15 bps area and the sole lead is DZ Bank.

MACRO EVENT RISK AND SPEAKERS

UK data sees the 0930GMT release of the DCLG House Price Index.

The EMU Feb final HICP data is due at 1000GMT and is expected to confirm the preliminary estimate of +0.9% y/y, while the German ZEW survey for March is also due at 1000GMT.

The ZEW's Economic Sentiment Index (ESI) fell for a fifth successive month in February, dropping by 2.1 points to stand at +45.1, its lowest level since July 2009. Nevertheless, it remains well above its historical average of +27.1. Meanwhile, the counterpart current conditions indicator posted a ninth successive rise in February, rising by 1.8 points to -54.8, its highest level since November 2008.

For March, the ESI is expected to see a further fall to 43.6, while the current conditions indicator is expected to see its tenth successive rise in March, to -52.0.

US data starts at 1145GMT with the weekly ICSC-Goldman Store Sales data.

The main US releases are at 1230GMT, when we get the Import, Export Price Index along with Housing Starts & Building Permits. The pace of housing starts is expected to decrease to a 565,000 annual rate in February after posting a modest gain in January.

The weekly Redbook Average then follows, at 1455GMT.

Back in Europe at 1445GMT, ECB Executive Board member Juergen Stark delivers a speech at the European Parliament.

The FOMC decision is due at 1815GMT and focus is on whether or not the central bank removes "for an extended period" from the statement accompanying its rate decision.

Market News International's Steve Beckner warned not to expect too much from the Fed. "At some point, the FOMC will no doubt signal an impending policy shift by changing key language in its policy statement," he said "But there is no indication that most members are yet ready to abandon the assertion that 'economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period,'". In the current economic environment, the Fed seems likely to maintain the "policy status quo," Beckner added. .

Late events include the Bank of England's Bean delivering a speech in London at 1900GMT, while late US data sees the 2100GMT release of the weekly ABC News Survey.