Europe Stock-index Futures Little Changed Before Data

government would cut fourth-quarter economic growth by as much as 1.4 percentage points depending on its length, economists said, as government workers from park rangers to telephone receptionists are furloughed. Mark Zandi of Moodys Analytics Inc. estimated a three-to-four week shutdown would cut growth by 1.4 points. Moodys projected a 3 percent rate of growth in the fourth quarter without a closure. Confidence among U.S. consumers declined to a five-month low in September, according to data released today. The Thomson Reuters/University of Michigan final index of sentiment decreased to 77.5 this month from 82.1 in August. The median estimate in a Bloomberg survey called for a drop to 78, after a preliminary reading of 76.8. Vallourec Slides Vallourec sank 8.2 percent to 45.28 euros. The French producer of steel pipes for the oil and gas industry said after the close of trading yesterday that a weak Brazilian real and slowing of drilling in that country may hurt profit. Tenaris SA declined 3.5 percent to 17.23 euros. Bank of America Corp. cut its rating on the steel-pipe maker to neutral from buy, citing lower near-term earnings expectations due to sluggish trends in North America and Europe. Countrywide Plc (CWD) dropped 4.9 percent to 518 pence. Alchemy Partners LLP is selling a 5.9 percent stake, about 12.9 million shares, in the U.K.s largest property broker, according to terms obtained by Bloomberg News .

Europe’s plan to address weak banks risks unraveling

“This good time is over,” said Zbigniew Jagiello, chief executive of PKO BP, Poland’s biggest bank. “Now Poland is faced with a new reality.” Poland has been a rare bright spot in an otherwise bleak European economic landscape, sustaining growth of around 2 percent last year in contrast to recession elsewhere. But such run-of-the-mill growth rates now expose the country to budget deficit and debt woes, Jagiello said. Mateusz Morawiecki, head of Polish bank BZ WBK, took a more upbeat line for the region’s top economy. “We noticed a breakthrough in the economy over the summer months,” when credit demand suddenly emerged, he said. “Maybe it will not be a V-shaped recovery but we are seeing a turn towards investments.” With signs that the worst may be over in the euro zone that absorbs a lot of emerging Europe’s exports, much hinges on whether sentiment in the region picks up again, officials said. “Consumption is still at a very low level because people do not have confidence in the recovery,” said Levon Hampartzoumian, head of UniCredit’s Bulgarian unit Bulbank. EYES ON THE FED That can also be seen in the shopping habits of Czechs, said Marek Switajewski, chief executive at Unipetrol , the country’s biggest petrol station operator. “Czech people in the past were stopping at (pricey) petrol stations buying food, drinks, … now people are very careful where they buy, they are much more focused on discounts,” he said. “We are still in recession and the recovery will be long and painful.” A big hurdle for the region is how investors react when the U.S.

REUTERS SUMMIT-Emerging Europe poised for modest economic upturn

I want to hear from the government what happens if banks fail.” With confidence in European banks still low, the sector is valued at a significant discount to U.S. peers, trading at around par with the book value of its tangible assets compared with around 1.7 times for the United States, according to an analysis by KBW. Europe’s top 42 banks are already about 70 billion euros short of meeting new international capital norms, even before taking into account that they have often set aside too little to cover unpaid loans or an economic slump. “We see a problem primarily in Spain and Italy, because that’s where you have a housing market that’s still in freefall,” said Jon Peace, an analyst with Nomura. “The small banks have bigger problems than the large ones.” OUT ON A LIMB Germany, the euro zone’s strongest economy, which has shouldered much of the burden for country bailouts, does not want a scheme that leaves it on the hook. That aversion is unlikely to change, whatever the outcome of current government coalition talks. Berlin has suggested that a bank resolution agency should only have power over the euro zone’s largest lenders. That would reduce any potential bill to be shared by the 17 euro zone countries, but such a deal could mean that small risky banks, at the heart of the current crisis, slip through the net. The absence of a financial backstop to help banks once their problems are laid bare may prompt the ECB to delay the tests of banks altogether, a move that could postpone supervision and damage the euro zone’s image internationally. The situation would be even worse if haggling between EU governments delays agreement – now penciled in for December – on the ‘resolution’ framework to cope with laggard banks. That would have a knock-on effect on talks to finalize the regime with the European Parliament, potentially leaving the ECB out on a limb when it takes on supervision, as now planned, towards the end of next year.