European Markets Seen Higher; Spain Worries Linger

European shares are seen opening the trading week slightly higher as fears of a euro zone debt crisis taking root in Spain continue to hold back sentiment.


London’s FTSE 100 is seen up by around 0.4 percent, Germany’s DAX is called higher 0.7 percent and the CAC is called to open flat.

Spain holds its first bond auction since the S&P downgrade last week following large scale protests across the country over the weekend at the austerity measures being rolled out by the government.

The Financial Times is reporting that discussions are taking placebetween the government and Spanish banks to segregate problematic property loans into one or more asset management firms in order to relieve the burden on struggling lenders.

In Greece, as campaigning heats up for upcoming elections, Socialist leader Evangelos Venizelos has come out to say that he will not impose any new taxes if he wins, ruling out any measures that would hit the elderly or low-wage earners.

A “no” result on the Irish referendum of Europe’s fiscal treaty would block access to Europe’s new permanent bailout fund, as well as funds from the International Monetary Fund.

The French election campaign approaches its final stretch ahead of the May 6 vote. Incumbent President Nicolas Sarkozy hopes to close the gap with Socialist rival Francois Hollande, recent days have seen Sarkozy appealing increasingly to the far-right and ramping up populist rhetoric.

Goldman Sachs’ Jim O’Neill has been approached for the top job at the Bank of England, the Sunday Times in the UK reported over the weekend. Existing governor Sir Mervyn King is set to resign in the summer of 2013.