Good morning,

Markets are called to open flat this morning. This is what's happening today:

  • Hypo Alpe said to require as much as $2.6b extra capital;
  • Nokia to acquire Siemens’ stake in Nokia Siemens Networks; purchase price for Siemens’ stake is EU1.7b;
  • Irish govt is working on a plan to recoup some of the money it plowed into failing lenders from the euro area’s backstop fund, FM Michael Noonan said;
  • Wood Group, Atkins poised to benefit as U.K. signs Kazakh deals;
  • Sabadell to sell 15.15% Banco Inversis stake for EU32.3m;
  • European conditions are set to worsen in 12-18 months, Soros tells Kathimerini; another writedown on Greek debt is needed;
  • U.K. house prices rose for a fifth month in June as a shortage of properties boosted values, according to Hometrack

European stock futures were little changed, following the Stoxx Europe 600 Index’s first weekly gain since May 17, as investors awaited a report on euro-area factory output and as China’s manufacturing fell. U.S. futures and Asian stocks excluding Japan were also little changed.

Nokia Oyj and Siemens AG may be active as the Finnish phonemaker agreed to buy the latter’s stake in a joint venture. Banco Sabadell SA and Bankia SA may move after the lenders sold shares in Banco Inversis to Banco de Madrid.

Futures on the Euro Stoxx 50 Index expiring in September gained 0.2 percent to 2,602 at 7:04 a.m. in London. The benchmark Stoxx Europe 600 Index advanced 1.7 percent last week as China took steps to ease a cash crunch. The equity benchmark has still declined 8.2 percent since Federal Reserve Chairman Ben S. Bernanke said May 22 the central bank could taper stimulus measures if the U.S. economy improves sustainably.

“If investors were hoping for a little less excitement and volatility for July after all the fun and games in June, then they could well be in for a rude awakening this week,” Michael Hewson, a market analyst at CMC Markets Plc in London, wrote in a note. “This morning’s disappointing manufacturing PMIs for June would seem to reinforce concerns about the faltering Chinese economy,” he said, referring to the country’s purchase manager’s index.

Contracts on the U.K.’s FTSE 100 Index rose 0.3 percent. Standard & Poor’s 500 Index futures added less than 0.1 percent, and the MSCI Asia Pacific Excluding Japan Index was little changed. Japan’s Nikkei 225 Index climbed 1.3 percent.

Stocks to watch: Vodafone (Price 187.85p, Price Target 215p)

We believe that recent developments increase the likelihood of a Verizon Wireless deal in the near-term. Whether VOD sells its stake, or Verizon instigates a Group-based merger/acquisition, we think a deal could crystalise value that is not currently reflected in Vodafone's share price and lead to a significant one off distribution to shareholders. With a deal more likely and consensus rebased following a tough H2, we have a BUY.

For more information on Vodafone or other stocks and bonds we follow, contact our offices on 25688688.

Good day and happy trading!

Kristian Camenzuli