--Euro-zone finance ministers expected to sign off Spain banks deal --Investors await modus operandi of deal --Dollar weakens against major currencies; U.S. economic data disappoint --Vodafone slides after earnings disappoint; LSE in focus on merger speculation Financial markets were treading water with stocks only slightly lower and the euro almost flat against the dollar as investors waited for the official approval of the Spanish banks' bailout. Euro-zone finance ministers are expected to formally approve the Spanish memorandum of understanding on the country's bailout deal for banks. This comes amid continuing violence on the streets of Madrid against the government's austerity measures. "Spain continues to be the focus of attention for investors," said Rebecca O'Keefe, head of investment at Interactive Investor. "The aggressive cuts implemented so far have failed to stem Spanish borrowing costs which are close to recent highs. With continued big protests from unions amid accusations that the cuts are having a negative effect, there is a danger that this situation could escalate." Investors will be waiting for several details to be clarified during the phone call between the Eurogroup. Firstly, investors will be keen to see if part of the European Union's bailout vehicle will set aside funds to buy Spanish government bonds, as speculated by the market on Thursday. Secondly, investors will want more details of the bailout and how it will take place. At the previous meeting, finance ministers agreed to first disburse 30 billion euros ($46.96 billion) to Spain by the end of July, so investors will watch out for further confirmation of this Friday. The phone call between the Eurogroup takes place at around 1000 GMT. Spain's government bond yields will undoubtedly be closely watched during the call as they have of late remained elevated. At 0800 GMT Spain's 10-year government bond yield was down two basis points at 6.97%. The 7% level is seen as unsustainable by the market. Spain's IBEX-35 was up 0.2% at 6646.10 and Spanish banks were mixed. Banco Santander was 0.4% higher and Banco Bilbao Vizcaya Argentaria was down by 0.5%. The benchmark Stoxx 600 index was down 0.2% at 261.21, led lower by telecomms stocks. Vodafone was down 2.9% in London after it reported worse-than-expected revenue in the first quarter of its financial year. Trading in its European regions cast a shadow over the results, though this was of little surprise to most analysts. The fall in Vodafone's shares also weighed on the U.K.'s FTSE 100 which was lower by 0.3% at 5696.85. London Stock Exchange was in focus on media reports that it had engaged in informal talks with the Singapore Exchange about a potential merger. The Daily Telegraph said the chief executives of the exchanges are "believed to have held" discussions about a possible combination in recent weeks but the Singapore Exchange debunked the story, saying it hadn't been in talks. Nevertheless, LSE was up 0.9%. In Germany the DAX was flat at 6758.11 and France's CAC 40 fell 0.2% to 3257.01. On foreign exchanges, the dollar was in focus following downbeat U.S. economic data Thursday. Investors have been eyeing U.S. data closely in recent weeks for signs of slowing economic momentum, which would raise the likelihood for further Fed easing; more easing from the Fed would depreciate the dollar. The euro was rather lackluster against the greenback, ahead of the Eurogroup meeting. At 0810 GMT, the euro was at $1.2270 from $1.2279 late Thursday in New York. The dollar was at Y78.60 from Y78.59. Elsewhere, the September Nymex crude oil contract was down $0.57 at $92.40 a barrel and the Brent September contract was $0.50 lower at $107.30. Spot gold was at $1,586.10 per ounce, $4.70 higher. With a meager economic calendar the focus will be on Spain and on earnings. General Electric's quarterly results will also be of interest as the company is seen by many as a bellwether of American business. Write to Andrea Tryphonides at andrea.tryphonides@dowjones.com or Twitter: @ATryphonides

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