European stocks sold off earlier this morning on a warning by Moodys that France is closer to losing its triple A rating but markets have now rallied after Germany’s central bank raised its forecast for economic growth and a strong  UK retail sales numbers. Crude is trading higher with European and Chinese equity markets.

Analysts at Barclays and Nomura lowered their estimates on how much capital major banks in the US and Europe will need to raise based on new Basel III rules. The change in estimates is due to a recent change in rules that will allow banks to keep tax credits, mortgage servicing agreements and other assets in their calculation of tier one capital.  

The European Commission said that Greece meets the conditions to receive the second part of a loan from the euro region member states. EU officials were quoted as saying the deficit cuts are ‘faster than planned’ but ‘ not there yet.’

We are seeing buying in the financial, technology and consumer goods sectors and selling telecommunications.

FTSE 100               +.20%

CAC                        +.75%

DAX                       +.52%