by Jeremy Spain,

Equities continued on their upward path on Wednesday as European stocks
were supported by strength in the basic materials and banking sectors.
Investor confidence was boosted by the Fed's pledge to keep interest
rates low for an "extended period", with the Dow climbing to a new
17-month high, at the same time notching up its seventh straight daily
gain.

Credit markets also had a positive day as European CDS indices were
tighter across the board, with the benchmark iTraxx Xover index closing
around 8 bps tighter at the 408 bps level.

However, the tone in Asian stock markets has been softer overnight, with
indices in the region weighed by a bout of profit taking after recent
gains. European stocks are expected to trade lower on the open, with the
Xover index currently around 8 bps wider trading at the 416 bps level.

Traders say, in addition to profit taking, there are a number of
stories weighing on sentiment. The FT has reported that the Spanish
finance minister has joined the calls for faster consolidation of the
country's weaker savings banks, admitting in the process that up to a
third of lending institutions could face "solvency problems". With the
question being asked by investors if Spain is hiding the severity of a
bad loan crisis, according to the reports.

Elsewhere, the European Commission has warned the eurozone's four
biggest countries, Germany, France, Italy and Spain, that their growth
forecasts for the next 3 years are too optimistic, endangering their
ability to cut deficits in line with EU rules.

Lastly, the Greek PM, speaking in Brussels yesterday, said that he
had not ruled out going to the IMF, although adding that Greece would
prefer a European solution. Greek government bond spreads over 10 year
bunds are currently around 1 bps wider trading at the 283 bps
level.

________________________________________________________________________

CORPORATE HEADLINES

FINANCIAL
-- The chairman of RBS has said that the UK government could begin
   selling some of its 84% stake in the bank within a year, in order to
   test investor interest - Daily Mail.
-- The Spanish finance minister, joined the calls yesterday for faster
   consolidation of the country's weaker savings banks, admitting in the
   process that up to a third of lending institutions could face
   "solvency problems" - FT.
-- The U.K. Financial Services Authority intensified its assault on the
   banking industry, with its chief executive announcing plans to rev up
   bank supervision and its chairman calling for tougher restrictions on
   financial institutions, including hedge funds.-WSJ
-- Four banks were charged with fraud yesterday for their roles in a
   E1.7 bln financing package for the Italian city of Milan in a case
   that will fuel the global debate about the use of complex   
   derivatives - FT.

AUTO
-- BMW AG confirmed its profitability targets for 2012 and said
   Wednesday that pre-tax profit in 2010 is expected to rise
   significantly after last year's industry gloom, driven by new or
   revamped models such as the 5-series.-WSJ
-- GM's finance chief said the company has a reasonable chance of
   becoming profitable in 2010 in his first public comments since
   joining the auto maker this year.-WSJ

CONSUMER
-- Diageo's Asian Pacific Chairman has said that China's market for
   foreign alcohol will grow even as investors warn of an economic
   bubble in the country - FT.
-- British Airways has seen its corporate family and probability of
   default ratings dowgraded to B1 from Ba3 by Moody's.
-- Thousands more British Airways passengers will be able to fly through
   the three-day strike due to start on Saturday as growing numbers of
   cabin call in offering to work, the airline said - FT.
-- Deutsche Bahn has approoached Arriva about a potential takeover bid
   that could value the UK transport group at around Stg1.21 bln.

INDUSTRIAL
-- Heidelbergcement said that FY net income declined 91% to E168mil,
   partly weighed on by one off charges.

BASIC MATERIALS
-- A shortage of iron and steel scrap has sent prices soaring 70% in a
   year, putting pressure on scrap merchants to find enough bits and
   pieces to keep customers happy.-WSJ

ENERGY
-- Enel has halved its dividend to reduce debt. Net income increased
   1.9% to E5.395mil for the FY, helped by a one off gain.

OTHERS
-- Regulators need new powers to control lending practices in targeted
   financial sectors and products to allow them to prick dangerous
   asset bubbles before they build up, according to the UK's top
   financial regulator - FT.
-- Greek PM Papandreau said Weds that he had not ruled out going to the
   IMF. Speaking in Brussels, Papandreau said "Nothing is excluded",
   when asked about IMF involvement. "If we realise that we will be
   borrowing at extremely high rates, there are other options. But we
   would certainly prefer a European solution" he said.
-- Brussels is to propose steps to tackle speculative trading, notably
   in relation to credit default swaps on sovereign debt - FT.
-- The EC has warned the eurozone's four biggest countries, Germany,
   France, Italy and Spain, that their growth forecasts for the next 3
   years are too optimistic - FT.
-- The chairman of the US Fed appealed to Congress to preserve the
   central bank's supervision of the financial system as lawmakers
   consider removing some of the Fed's powers - FT.
-- German chancellor Angela Merkel challenged Gordon Brown to drop his
   objections to European regulation of the hedge fund and private
   equity industry, saying the bankers' bonuses tax "is only half as
   good an idea as the hedge fund rules - FT.

________________________________________________________________________

EURO SUPPLY PIPELINE: Mar. 18

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.
* 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.
* Eurohypo Luxembourg - Is to issue a benchmark, 3 year fixed rate
  covered deal in Euros. Price talk is in the mid-market swaps plus
  35-40 bps area and the leads are BNPP, Commerzbank and LBBW.
* Berlin-Hannoversche Hypothekenbank - Is to issue a benchmark, 6 year
  fixed rate covered deal in Euros. Price talk is in the mid-market
  swaps plus 12 bps area and the leads are BayernLB, DekaBank and
  UniCredit.

CORPORATES

* 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.
* Vicat - Has mandated BNPP, Credit Agricole and SocGen to organise a
  roadshow which will occur in Paris and London next week. The company
  will issue an inaugural Eurobond deal in the near future subject to
  market conditions.

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

In Europe today, the European Parliament have a hearing on European
economic governance and EU tools for economic recovery, while the ECB
also holds a Governing Council meeting, although no monetary policy
decision is scheduled at this meeting.

EMU data starts at 0900GMT with the January current account data.

UK data at 0930GMT sees Trends In Lending data from the Bank of England
and also CML Gross Mortgage Lending data, while at the same time,
Provisional M4 Lending and Money Supply data is due along with the
public finances data, where PSNB is expected to grow to stg13.4 billion
and PSNCR is seen st stg11.0 billion.

At 1000GMT, the EMU trade balance is expected to come in at +E1.0
billion for January.

UK data should also see SMMT Car Production, while at 1100GMT, the March
CBI Industrial Trends Survey is expected to see the Total Orders Balance
come in at -32.0 after -36.0 last month.

At 1230GMT, the Federal Reserve Bank presidents of Kansas City (Thomas
Hoenig), Richmond (Jeffrey Lacker) and Cleveland (Sandra Pianalto) are
all due to appear on a panel about the role of banking in local
economic growth at the American Bankers Association conference.

US data also starts at 1230GMT, when initial jobless claims are expected
to decline 7,000 to 455,000 in the week ended March 13. The current
account data is due at the same time, as is CPI, which is expected to
rise 0.1% in February, with gasoline prices down in the month. Core CPI
is also expected to rise 0.1%.

US data continues at 1400GMT, when the Philadelphia Fed index is
forecast to edge up to a reading of 18.0 in March after the modest
increase in February. At the same time, the growth in leading indicators
is expected to slow to 0.2% in February on weaker employment, stock
markets and consumer sentiment. Building permits, vendor performance,
money supply and the yield curve are likely to bring positive
contributions.

US data also sees the 1430GMT release of the weekly EIA Natural Gas
Stocks data.

At 1700GMT, Swiss National Bank board member Jean-Pierre Danthine
speaks, in Zurich.