1:00 PM Frankfurt – The European indexes traded lower ahead of the German court ruling on Spanish bank bailout plan. Italy planned to cut public debt by 20% in five years. Accor agreed to acquire hotel portfolio of Mexico-based Grupo Posadas.
European markets traded lower as leaders in the region await the approval of Spanish bank bailout later in the week. Investors are also awaiting the global economic status report from the I.M.F.
On Thursday, German Constitutional Court is expected to approve the European plan to provide as much as €100 billion in aid to Spanish banks.
In the economic news, inflation in the euro-zone was stable in June but trade surplus rose more than expected in May.
Euro-area finance ministers are scheduled to meet on July 20 that could lead to early approval of the €30 billion bailout to Spanish banks.
Italy plans to dispose public assets between €15 billion and €20 billion each year in order to reduce its public debt by 20% in five years, Finance Minister Vittorio Grilli said in an interview to the Italian daily newspaper Corriere della Sera. Italy''s public debt currently equates 123% of GDP.
Chinese Premier Wen Jiabao said that the nation''s economic recovery was not stable and that the government will step up efforts in the second half of the year to stabilize the economy and support growth, according to the official Xinhua news agency.
French President Francois Hollande said in a televised interview with the TF1 that PSA Peugeot Citroen''s plan to cut jobs is “unacceptable and should be renegotiated.”
The French carmaker on July 12 announced 8,000 job cuts and the closure of its Aulnay plant in 2014 to stem rising operating losses.
In Paris trading, the CAC-40 Index declined 11.19 or 0.4% to 3,169.20 and in Frankfurt the DAX Index edged lower 18.49 or 0.3% to 6,538.91.
The yields on Spain’s benchmark 10-year bonds rose seven basis points to 6.67%. Italian 10-year yields climbed two basis points to 6.05%.
Euro-zone Inflation Stable
Annual inflation in euro-zone was 2.4% in June, unchanged from May, the latest report from Eurostat showed today. The data matched the preliminary estimate. A year earlier the rate was 2.7%.
Separately, euro-zone''s trade surplus rose more than expected in May, a report from Eurostat showed.
The trade surplus increased to €6.9 billion in May, higher than €3.7 billion in April, compared to a deficit of €1.2 billion.
German Factory Employment Climbs
Employment in German manufacturing sector rose in May, data from the Federal Statistics Office showed today.
The number of workers in the sector rose by about 140,100 persons or 2.8% annually to 5.2 million people in May.
Accor Acquires Grupo Posadas
Accor SA, the French hotel operator acquired the South American hotel portfolio of Grupo Posadas for $275 million. The deal is expected to close by the end of the year.