MoreLiver's Daily: May 2012

Thursday, May 31

31st May - US Close: Diaspora

Here are the US close regulars and article links. In Europe, there are no plans, backstops, support or trust. Everyone knows the other guy's numbers are not to be trusted. Everyone is trying to offload costs to someone and no-one is picking up the responsibility or the losses. Shareholder of a bankrupt bank? "I am systemic!" Spain's politicians almost half as corrupted as the ones in Greece? It was the Le-man!. They are not going to get anything done.

For my own recent commentary, see how Spain looks easier, how to play announcement games, and when Spain requests the bailout. If you happen to speak Finnish, check my other today's article on Spain.

Here are the US open regulars and few article links. For my own recent commentary, see how charts tell about a crisis pause, how to play announcement games, and when Spain requests the bailout.

End of the month – are we going to see some window-dressing? AAPL’s price looks like it is trying to break up from its recent trading range. Europe is in flames – but can the eurocrats hold back the Uruk-Hai of the market forces, until ECB’s meeting and G20? One thought: The Spanish CDS price is at the top of the multiyear rising trend channel, while Spanish bond yields are at the top of the trading range - and curve inversion is already in place. Just looking at the charts, and forgetting about everything I know about the situation and my own feelings toward it, it is time to lighten up on Spanish shorts.

I will update the rest of the links as they come online.

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30th May - Credit Guest: The Daughters of Danaus

Another credit post from Macronomics, focus on. Europe and especially Spain.

No fiscal union, no ECB loan to Spain, no ESM funding to banks – so I guess muddling through. Next stops in the show – ECB cuts rates by 0.25% - no more, even though 0.5% would be the right thing to do, so of course it will not be done. I guess they are trying to push forward all the heavy lifting to the G20-meeting in mid-June. There will be plenty of announcements coming - the 'announcement game' is a cheap way to mess with the markets and stop anyone from taking too aggressive positions against the eurodream.

Outside the two main events (ECB and G20) trade the news - go against impressive-sounding headlines. We've already got the Chinese about to ease some more, then the ECB loan to Spain, then the economic union, deposit guarantee... They cannot use IMF anymore, as they basically used that card already. Any ideas what to expect? And now to the regular links and select articles.

Here are the regular links for the US open and a big article pile to chew on. See previous two US Close: Beatings Will Continue Until ... and EU Open: Spainout coming... for more and some thoughts of mine. I know I am not surrounded by intelligent, market-savvy professionals, and this might be obvious to my readers, but it is an interesting point that the German bonds include a currency option that pays out in case the eurozone breaks up. So it is not only the run to safety and deflation that is driving the bond yields ever lower.

The morning regulars and select article links. See last night’s long post and my commentary.

Here is the massive article linkfest and the US close regulars. Key issue for European markets is that ECB has denied the Spanish Central Bank from loaning the funds for banks' recapitalization from the ECB. I wrote earlier on a domestic forum that my set date for an official bailout request is next Tuesday, as I guessed the ECB's decision.

Markets will kick the Spanish bonds and during the weekend there will be some pathetic telephone calls across Europe, followed by some pathetic statements. Market will not buy any of that bullshit, and yields will continue creeping higher on Monday. If it is not the next Tuesday, it will be the following Tuesday - in that scenario the markets will wait until the ECB's meeting, and if something absolutely fabulous is not flowing from Draghi, the beatings shall commence.

29th May - US Open: Bankia Bankia...

Couple of must-reads in today's linkfest, plus the regulars. I just wonder.. everyone knew that Spain is a colossal failure. Why it seems to be a surprise for everyone now is beoynd me. Any ideas?

Some article links plus the usual morning regulars. Even though it seems it's "all about Spain", don't forget the Irish referendum on Thursday. At least the open did not hurt European bond markets much more. As the US is back from holidays, this is supposedly an interesting day. I disagree - given the charts and the newsflow calendar, I am expecting a day or two of not much happening - just very nervous markets on low volume and low conviction to either side.

28th May - "US Close": Memorial Day

Just a quickie update because of the holiday in U.S.. Nasty day in Europe, it will be an interesting Tuesday for sure. The Calendar page has been updated. Did you do something stupid during the long weekend? Or at work? Don’t worry, try one of these tested defense strategies: Black rage, Twinkie, Chewbacca, Matrix or Gay Panic

Here are the “US Open” regulars and some select article links. The US is closed for the Memorial Day.

Just the morning briefs but first a reminder of what I posted during the weekend:

Links to research notes from banks. Some of these might be removed, so save what you want. I am not hosting these documents, just linking to them. Also see last weekend’s Sell-Side Research and follow ‘MoreLiver’ on Twitter or Facebook.

27th May - Weekender: Off-Topic

Weekend's truly off-topic but nevertheless interesting article links.

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Previously on MoreLiver's:

27th May - Weekender: Trading & Markets

27th May - Weekender: Economics & Regulation

27th May - Weekender: Euro Crisis

26th May - Credit Guest: St. Elmo's Fire

26th May - Weekly Support

Weekend's reading package on Trading and Markets, happy hunting.

Weekend's reading package on Economics and Regulation, have fun!

Here are the weekend’s article links on the ever-lasting euro crisis.

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26th May - Credit Guest: St. Elmo's Fire

Before the usual Weekender-posts, please enjoy the latest from Macronomics:

Here are the week in review and next week previewed-links. I will update this later.

25th May - US Close

Just the regulars:

US Open regular links and some articles. As Europe seems to be frozen policy-wise, take a look at the highlighted articles. Someone has to give in soon. All this talk about the Troika and Athens playing a game of chicken is bullshit. The true game is between the banks and the ECB. It is not about the PIIGS vs. FANGS. It is about Germany against everyone else.

Here are the "best" article links from my ending week's blog posts. Not surprisingly, it is mostly about Europe. Follow ‘MoreLiver’ on Twitter or Facebook.

Just the morning links.

24th May - US Close

Here are the evening links for the day.

Another US open, after lousy European PMI’s and a summit that had no results. For my commentary see last night’ US Close: Summit to kick Greece. With all the bad news, talks of imminent coordinated central bank action will surface soon in financial centers near you.

In addition to the standard morning regular links, sections on today's lousy Chinese PMI and more importantly, the EU summit (that didn't do anything, as expected).

23rd May - US Close: Summit to kick Greece?

Here are the US close regulars and other article links. Some interesting rumors floating around, some of them outlined below. It might be that they are just increasing the pressure on Greeks to vote "correctly" - or are actually preparing to kick Greece out.Of course, in order to make it look like they mean it, it will have to look like they mean it. This makes it very hard to decipher what is really going on.

My guess is they probably want to throw Greece out, as politically they could put all the blame on Greeks and the European banks are relatively safe, as their losses have already been socialized. But they have to make it look like they really, really wanted Greece to stay. It's like with you mother-in-law visiting. You have to act, sob at the door that she must already leave and oh when will I see you again. Crocodile tears and all. Even if inside you're dancing.

Here are the regulars + select articles. Follow ‘MoreLiver’on Twitter or Facebook.

Another guest post by the always enjoyable Macronomics:

Just the morning briefs and some extras on today’s European summit. For more on Eurobonds and article links, see yesterday’s US Close: Combing and US Open: Another Summit Eve. Follow ‘MoreLiver’ on Twitter or Facebook.

22nd May - US Close: Combing

It looked like a rally day, but soured towards the end of the day. As the eurocrats are again drinking too much coffee (together with the famous "comb" pictured to the right) so that they would have the energy not to agree on anything , the world holds its breath. If you feel a bit intimidated by the photo, you should - the "comb" has crushed the spirits of numerous companies worldwide and made politicians what they are today.

Here are the US open links plus plenty of article links on euro crisis. All eyes on the Wednesday's EU summit that is hoped to present some plans to solve the current mess. As Germany will not budge, all they will have to show for the meeting will be some pocket change for infrastructure project bonds and a possible easing of the budget constraints. I don't see how this would help anyone, as the project bond amounts will be small and what the periphery lacks is definitely not more construction. Budget constraints have already been broken, giving permission to do it after the fact is hardly earth-shattering stimulative action.

Before ECB prints and backstops, the show will go on. Meanwhile, ELA lending from ECB to Greece is calculated to have passed the 100 billion euro mark.

Just the morning briefs. See yesterday's Follow ‘MoreLiver’ on Twitter or Facebook.

21st May - US Close: Saving Euro 1000bn

Some very interesting and high-quality research pieces in this post – take a look at the highlighted ones. Also see today’s earlier Extra: European updates and US Open: Phew, no Grexit yet for more. JP Morgan-post is also updated.

Here are the US open regulars and again some select article links. Markets are somewhat more relaxed after the weekend, as the Greece's exit from euro is expected to happen during the weekends. So, we should now understand that markets will go risk-off towards the end of this week? See today’s earlier Extra: European updates for more.

An extra update on mostly Europe, more in US Open post.

Just the morning briefings – I will soon post an article update and the usual US Open and US Close posts regularly.

20th May - Weekender: Sell-Side Research

Weekend's linkfest on trading and markets. The article on Dalio is a must-read. Follow ‘MoreLiver’ on Twitter or Facebook.

Weekend's linkfest on Economics. Downturns everywhere, but an interesting point for investors: mergers are coming. Better load up on those takeover targets. Follow ‘MoreLiver’ on Twitter or Facebook.

Weekend's linkfest on the European crisis. Greece and Spain dominate the discussion. ECB must be under tremendous pressure from the eurocrats. Follow ‘MoreLiver’ on Twitter or Facebook. The JP Morgan post has been updated.

Previously posted:

19th May - Best of The Week

19th May - Weekly Support

20th May - Weekender: Off-Topics

Weekend's linkfest to articles that have nothing to do with the markets. NATO and gambling are this week's themes. Follow ‘MoreLiver’ on Twitter or Facebook. The JP Morgan post has been updated.

Previously posted:

19th May - Best of The Week

19th May - Weekly Support

Here are the week in review and next week previewed-links. A bit short on material, but I will update this post on Sunday.

Here are the week's best picked from my earlier blog posts. My summary of the week would be: Greece is gone, Spain is going and we're waiting for a response from the ECB, while everyone is risk-off. Follow ‘MoreLiver’ on Twitter and Facebook and spread the word.

18th May - US Close

Just the regulars, dear:

Facebook day - MoreLiver holiday

See last night’s long US Close: Running Man for some very good articles. The JP Morgan Losses post has been updated. Follow ‘MoreLiver’ on Twitter and Facebook.

17th May - US Close: Running Man

Fast markets and quite risk-off – I expect more running (sorry, JOGGING) to safety ahead of the weekend – just in case ECB pulls the plug on Greece’s TARGET terminal. Bankia's stock in Spain down on rumors of jogging deposits 29% at one point.

The JP Morgan Losses post has been updated. Remember to follow ‘MoreLiver’ on Twitter and Facebook.

Here's the latest from Macronomics, with special focus on Greece and the comparisons to Argentina. Remember, covering fire, short controlled bursts.

Here are the US open briefings and select articles. Bank jogs are turning into bank runs. Bankia, the recently bailed-out bank is losing deposits and its stock is down 28% today. All eyes are turning to the ECB, though Germany promising to backstop everything could also help. Germany will not do that, and probably will not allow printing - yet. So kiss your TARGET2 receivables goodbye?

For more of my thoughts and article links, see last night’s US Close: European Roller Coaster and remember to follow ‘MoreLiver’ on Twitter and Facebook.

Just the morning reports, make sure to take a look at my thoughts in the very long US Close: European Roller Coaster and US Open: Eurocrisis Holiday - and remember to follow ‘MoreLiver’ on Twitter and Facebook.

16th May - US Close: European Roller Coaster

What a set-up today. Earlier, we had reports that the ‘bank jog’ in Greece is showing signs of turning into a full-blown run on banks. The political leaders had for the first time acknowledged that Greece could, in fact, leave euro. Greece had difficulties forming a government, and the Eurogroup meeting was adamant that Greece has to conform to the austerity program. Then...

The slide of Spanish bond markets was halted – either because of Hollande’s and Merkel’s statement that they will go easier on Greece, if it just sticks to the basic austerity program, or because ECB was supporting the markets. It could be both – we’ll see about this later. See last night’s US Close: GRRR!! for plenty of articles and remember to follow ‘MoreLiver’ on Twitter and Facebook.

Just the regulars, for reads do check last night's long and nice US Close: GRRR!! and US Open: Merde Meet. I will update this post later - and remember to follow ‘MoreLiver’ on Twitter and Facebook.

15th May - US Close: GRRR!!

So, Greece could not produce a techno government and now they are heading for new elections. Markets went risk-off, and the Spanish yields are near levels where a margin hike is expected soon. Should this happen, there will be automatic and perhaps even positive feedback-selling, and without quick intervention from the ECB that would pretty much be it for Spain. Probably ECB has to act before LCH hikes the margins, so it will be an interesting Wednesday in Europe. Follow ‘MoreLiver’ on Twitter or Facebook. And read Buiter's piece on Grexit.

Here are the US open regulars and some select article summaries. The Eurogroup meeting came and went, Europe had zero GDP growth and everyone is still waiting for the news on Spain and especially Greece. Hollande and Merkel (=MerDe) are having a meeting. For more reads and some comments from yours truly, see last night’s long US Close: Exit Greece, Enter MerDe. Follow ‘MoreLiver’ on Twitter or Facebook.

The morning briefings (still waiting for few updates)… for article links and US review, see last night’s long US Close: Exit Greece, Enter MerDe. Follow ‘MoreLiver’ on Twitter or Facebook.

14th May - US Close: Exit Greece, Enter MerDe

The Eurogroup meeting is not going to give any real concessions to Greece. Greece cannot form a government. Greece has a large bond payment due on Tuesday, and if it pays it, the country has remaining funds for couple of weeks. Someone will soon blink and either the eurocrats cave in, or Greece agrees to have "technical assistance" to form a techno government, just like Italy has.

Here are the US open briefings. For Europe, see Euro Special: Everything Must Go! and for some JPMorgan fun, see JP Morgan Losses. Follow ‘MoreLiver’ on Twitter or Facebook.

A very special post, for a very special day. Spanish 10-y bond yields at 6.22%, CDS at all-time-high. The total direct losses from Greece are estimated to be around €500bn, and the contagion will easily double or triple that amount. We can now forget about the stability pacts, six packs, austerity pacts and masonry sects. We can also forget the fiscal union, transfer union and the Kalmar union. The only possibility now is for the ECB to print - and print massively, to the tune of trillions. See also 12th Feb – Greek Exit Collection and follow ‘MoreLiver’ on Twitter or Facebook.

Here are the European morning briefings, there have been plenty of developments during the weekend and I will next post a quick update before the regular US Open post. But first what you might have missed during the weekend:

13th May - Weekender: Sell-Side Research

Links to research notes from banks. My previous post got deleted, so save what you want now. I am not hosting these documents, just linking to them.

Here are some easier Sunday readings. Also a special song for all the mothers! Follow ‘MoreLiver’ on Twitter or Facebook. The LTRO and JP Morgan posts have been updated.

Previously on MoreLiver:

13th May - Weekender: Trading & Markets

13th May - Weekender: Economics

12th May - Weekender: Euro Crisis

12th May - Credit Guest: Interval of Distrust

12th May - Weekly Support

11th May - Best of The Week

Here are the week’s markets- and trading-related articles, now even less technical than previously. Follow ‘MoreLiver’ on Twitter or Facebook. The LTRO and JP Morgan posts have been updated.

Here are the week’s select economics articles, mostly about central banks – monetary policy, both conventional and unconventional. Follow ‘MoreLiver’ on Twitter or Facebook. The LTRO and JP Morgan posts have been updated.

12th May - Weekender: Euro Crisis

Here is the huge reading package on the European mess for the weekend. Plenty of charts in this post - check the sections Greece and Spain below, and click the pics to view a larger version. Markets & Trading, Off-Topic and possibly Sell-Side Research posts coming up on Sunday. Follow ‘MoreLiver’ on Twitter or Facebook. The LTRO and JP Morgan posts have been updated.

Guest post by Macronomics, enjoy!

Here are the links to summaries of the previous week, followed by what's ahead. This post will be updated later. Weekender-posts coming up later. Plenty of drivers for increased volatility, stay safe and stick with the stop losses. Follow ‘MoreLiver’ on Twitter or Facebook.

11th May - Best of The Week

Here are the best links from the past week. Sections this time: Euro Crisis: General / Euro Crisis: Greece / Euro Crisis: Spain / Central Banks / Views: Stock Markets / Other / Off-Topic

Usual Weekender posts coming up later. Don't forget, it will be Mother's Day on Sunday. Follow ‘MoreLiver’ on Twitter or Facebook.

Here are the US open briefings. For more see last night's US Close: Grexit, not yet? and earlier EU Open: TGIF. For added sensationalism, see JP Morgan Losses. Next up the Best of The Week, have a great weekend. Follow ‘MoreLiver’ on Twitter or Facebook.

Roundup of coverage on the JP Morgan losses. New ones are added to the bottom of the list.

JPM data by YCharts

Just the morning links:

10th May - US Close: Grexit, not yet?

Plenty of opportunities to fail. Click to enlarge.

New issue of The Economist is out. Check my previous posts EU Open: Greece + Spain = GRAIN? and US Open: BIS, ECB Reports for more articles, and follow ‘MoreLiver’ on Twitter or Facebook.

Voices calling for easier monetary policy. At zero interest rates, it's helicoptering, QE, backstopping and SMP. I can almost hear the 80's-style cylon-voice saying All losses must be socialized.

Greece and Spain, the only two games in town. The drop in German yields says it all - safety first and risk-off. Given this environment, it is surprising that the stock markets have held up so well. I think this shows that a chance of money printing by the ECB is being priced in. See yesterday's 9th May - You Shall Not Leave! and 9th May - US Open: Spain's Bail, Banks Thank for more article links and to get an overview of the two countries. Please follow ‘MoreLiver’ on Twitter or Facebook.

9th May - You Shall Not Leave!

Evening links, dear friends. Follow ‘MoreLiver’ on Twitter or Facebook.

Here are the US Open regulars and select article links. EDIT: Surely everyone has noticed the real news of the day: Spanish yields back above 6%.

After these morning briefings, please check last night’s long US Close: It's All Greek To Me and follow ‘MoreLiver’ on Twitter or Facebook.

8th May - US Close: It's All Greek To Me

Here are the US close regulars and the usual links to select articles. Greece dominates the headlines, but was anything else really expected? That they could and would pay their debts, and the socialized bank positions sitting at the EFSF and TARGET2 balances would not be realized? Greece is not the end, but it could be the beginning of something else.

Another guest post by Macronomics:

Here are the regular US open links + select article links: Greece seems to be the most pressing issue, and seems we are back in the good old risk on/risk off-pattern. You can get update notifications by following ‘MoreLiver’ on Twitter or Facebook.

The euro is dropping (still above 1.30 vs. USD) and several analyst pieces note that unless Greece can form a functional government and stick to the austerity plan, the IMF will not release the next tranche of funds – and Greece has a large bond payment to make on 15-May. Apparently the hard default is not off the table. See last night’s extra-long post Monday Mon Dieux for the articles.

You can get update notifications by following ‘MoreLiver’ on Twitter or Facebook. Contact me with any questions or suggestions – I will write more for the US open post.

7th May - Monday Mon Dieux

Here is the huge link fest after the first day of trading after the elections. After Monday’s bank holiday in UK, Tuesday will set the tone for the next couple of weeks. I believe this week will be bullish – technically, all the markets have bounced from support levels, and valuation-wise, end of austerity and "pro-growth" sound good. But there is no room to lower rates, except in Europe (and even then only in a true emergency), and there will probably not be further QE or LTRO. So medium-term bull (this week, maybe couple of weeks), followed by another sell-off, perhaps in time for the May 15 bond payment that Greece has to make?

Here are the US open links - UK was closed and markets are reacting just as I expected: the "buy the rumor, sell the news" is working in reverse, and markets are rallying after the "bad news".

Elections are over, euro is weaker and has broken outside its recent trading range and stock index futures trading lower. On the other hand, euro quickly returned to the range and SPX is at support levels. Trust the charts, fade the news? For election coverage, see the updated Election. Bank holiday in UK.

Please follow ‘MoreLiver’ on Twitter or Facebook, and contact me with any questions or suggestions. What do you think, Merklande, Hollkel, Homer, Merde, Mellande, Mellander, Merder or Landmerk? Before the usual morning briefings, here's what you missed during the weekend (the Calendar-page has been updated as well):

6th May - Credit Guest: Peripheral Banks, Kneecap Recap

Another guest post by Macronomics, this time on how, when and why to recap the banks.

A very topical credit guest post by the trustworthy Macronomics, enjoy!

5th May - Weekender: Off-Topics

Watch out, Bruce Lee

Here are some off-topic articles from mostly the past week. Unless something crazy happens during the weekend, this is my final post for the week, next update on Monday morning. You can get update notifications by following MoreLiver on Twitter or Facebook. Contact me with any questions or suggestions!

Here are the less-timely trading-, markets- and research-related article links from the past week or so. You can get update notifications by following MoreLiver on Twitter or Facebook. Contact me with any questions or suggestions!

Here are the less-timely economics articles from the past week or so. You can get update notifications by following MoreLiver on Twitter or Facebook. Contact me with any questions or suggestions!

Here is the weekend’s linkfest on euro crisis. The usual Trading, Economics, Off-Topic posts are coming up next. Please follow ‘MoreLiver’ on Twitter or Facebook and contact me with any questions or suggestions. Previously on MoreLiver:

4th May - Best of The Week

4th May - Recognition?

4th May - US Payrolls Aftermath

4th May - Weekly Support

5th May - Weekender: Elections

Election time in France and Greece. I wrote some of my thoughts here and I will update this post (new stuff at the bottom). Please follow ‘MoreLiver’ on Twitter or Facebook, and contact me with any questions or suggestions.

French Election – BBC

French Election – Spiegel

Preview Of Monday Morning – ZH

Elections reaction: Live blog – FT

4th May - Weekly Support

Here are the links to the weekly roundups, reviews and also previews of the beginning week. I will update this post as new stuff comes online.

The usual weekend postings coming later, for now, have fun! You can get update notifications by following MoreLiver on Twitter or Facebook. Contact me with any questions or suggestions!

From the sources I follow, here's everything related to the lousy payrolls:

Payrolls coming up and the last trading session before the European elections. Probably a good idea to go into this weekend with limited risk – Hollande is not dangerous, as he will do whatever he is supposed to do – and currently even the “wrong” ideas might be better policy-wise. Biggest question mark is the lovely holiday destination for bailout funds – Greece.

Here are the week’s best articles picked from my earlier posts. Main news was the unsuccessful EU meeting on bank capital requirements. The regular US open post coming up later and be sure to visit me during the weekend as well. Earlier on MoreLiver: Morning Briefings and Portugal & Spain to parity?. You can get update notifications by following ‘MoreLiver’ on Twitter or Facebook. Contact me with any questions or suggestions.

Here are the regular morning briefings plus some extras. This post will be updated when the articles are published. Please see last night’s Portugal & Spain to parity? for my thoughts and the usual huge linkfest. You can get update notifications by following ‘MoreLiver’ on Twitter or Facebook. Contact me with any questions or suggestions.

3rd May - Portugal & Spain to parity?

ECB’s meeting is now over and we are back waiting for the US payrolls – to see if the ‘decoupling’ will continue. My gut feeling is risk-off – the Greek election is a major risk event, and the ‘central bank puts’ on both sides of the Atlantic are on hold for now.

Here are the US open regulars. You can get update notifications by following ‘MoreLiver’ on Twitter or Facebook. Contact me with any questions or suggestions.

Here are the regular morning briefings - for more reads, see yesterday's US open Europe's 'surprise' and US close The Worst Idea. You can get update notifications by following ‘MoreLiver’ on Twitter or Facebook. Contact me with any questions or suggestions.

2nd May - The Worst Idea

Quite an interesting paper from JP Morgan on how the Euro Zone is, as an Optimal Currency Area, even a worse choice than we have thought. Otherwise, mostly economics and few words on the talks on how, when and why the bank capital requirements are increased. The Milken Institute's video is hard on Europe and recommended.

Very bad macro from Europe, after yesterday's good number from it looks like we are in for some 'decoupling' for a while. Here are the regular US opening links and some interesting article links. I have changed the regular link outlay: the news-heavy links are first, followed by more market-related stuff. You can get update notifications by following ‘MoreLiver’ on Twitter or Facebook. Contact me with any questions or suggestions.

Here are the regular morning briefings plus a ECB preview by Danske. You can get update notifications by following ‘MoreLiver’ on Twitter or Facebook. Contact me with any questions or suggestions.

1st May: US "decouples" again

Again some strong numbers from the US. After the talk couple of months ago that the US economy had decoupled from Europe, the optimists were gravely disappointed - I guess this time people will be a little less enthusiastic about the strong numbers. Besides, stock prices have already risen and Europe is not looking hot at all - so I guess after a month or so of "decoupling", US will again revert to the mean. The alternative would be that Europe would suddenly start growing briskly. Somehow I find that a bit hard to swallow.

Euro Group’s Juncker announced his resignation, and probably not because he wants to take time off to attend the Mayday techno rave’s after parties. I believe the real reason for the resignation is his disgust at the ongoing planning to recapitalize the Spanish banks.

As with any recapitalizations, the bill will always be left to the ones not only willing, but also able to pick it up. In this case it means mostly Germany and few other countries, and the probable vehicle will be the ESM – but first the Euro Group must decide how to circumvent the ESM’s rules. I do see the funny side of this: Italian taxpayers bailing out Spanish bankers.

News roundup – Between The Hedges

News roundup – The Trader

Emerging London Headlines – beyondbrics / FT

The 6am Cut London – alphaville / FT

Press digests by Reuters: FT, WSJ, NYT

Danske Daily – Danske Bank (pdf)
China NBS PMI manufacturing rose to 53.3 in April, the highest reading in a year. Weak Chicago PMI ahead of today’s ISM. Jean-Claude Junker steps down as head of Euro Group

Morning Briefing: Germany’s stance on the EU's fiscal pact risks its isolation – BNYMellon

Capitulation will be untenable for many of Germany’s officials (including Schäuble – see Headlines) and taxpayers – many of whom are aware that the country’s Target II exposure is already tracking an explosive path; and when discussing such issues we should certainly not forget the dark conversations reportedly held between “senior figures in the German establishment” per FT columnist Gideon Rachman’s article earlier last month, entitled the “time bomb no one can defuse”. Whether to commit fully to the EMU project is a question that German must answer and probably sooner than it would like.

Market Preview: Eyes on US ISM Manufacturing Index – Saxo Bank

UK markets are likely to open higher Tuesday ahead of the release of data due today which is expected to indicate that manufacturing in the US probably expanded at a slower pace in April. Markets are also keeping an eye on the UK manufacturing PMI.

TV: Bloomberg, CNBC, BBC

Debt crisis: live – The Telegraph

Europe Crisis Tracker – WSJ

Tracking Europe’s Debt Crisis – NYT

FX Options Analytics – Saxo Bank

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