31st May - EU Open: Spanish Shorts

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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Previously on MoreLiver’s:

Credit Guest: The Daughters of Danaus (mostly Spain)

US Close: Announcement Games XIV (my comments on announcement games)

US Open: Implied Breakup? (the core bonds price in future currency strength)

and for my guess on the Spanish timetable:

29th May - US Close: Beatings Will Continue Until ...

 

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

Commodity Summary – Commodities Trader

TV: Bloomberg, CNBC, BBC

Debt crisis: live – The Telegraph

The Euro Crisis Blog – WSJ

Tracking Europe’s Debt Crisis – NYT

FX Options Analytics – Saxo Bank

European 10yr Yields and Spreads – MTS indices

Danske Daily – Danske Bank(pdf)

The increasingly dire Spanish situation is affecting global risk sentiment. The sell-off in the global stock markets continues with both US and Asian stock markets following the sell-off in the European markets yesterday. Safe-haven currencies like dollar and yen continue to strengthen and the euro has
come under further pressure. 

Market Preview: US GDP in focus – Saxo Bank

European markets are likely to open lower Thursday on persistent concerns over the debt crisis in the Eurozone. Markets await first quarter US Gross Domestic Product data due later today which is anticipated to show a downward revision.

Morning Briefing – BNY Mellon
The events of 2008 suggest that downside risk remains for GBP against the USD. 

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EURO CRISIS

Italy's recession is becoming severe – Sober Look

No matter how many reports the EC writes, there is nothing that can pull Italy out of this recession in the near term. The situation will get a great deal worse before it gets better. And the EU needs to come to terms with it sooner rather than later.

Credit Suisse: The 5 problems needing resolution in Europe – PragCap

In essence, they say the crisis is likely to deepen before forcing the hands of politicians in achieving what needs to be done.  They offer 4 current scenarios for Europe with an 80% probability of the Euro staying together in its current form

Spain: Bankia Down, Who Is Next? – ZH
Goldman Sachs: Spain will need to spend at least another €25 in bailout funding for six other listed banks which include CaixaBank SA, Banco Santander, Banco Popular Espanol, BBVA, Banco Espanol de Credito SA, Bankinter SA.

Spain cries for help: is Berlin listening? – Reuters

Crisis is the watchword in Madrid. Take your pick - liquidity crisis, debt crisis, banking crisis, economic crisis, confidence crisis, investor crisis, jobless crisis. Spain, the ailing euro zone's latest problem child, has them all.

Worries Over Spain … SPexit? – The Big Picture

Summaries and links to recent articles

Today in Europe – Free exchange / The Economist

Not for the first time, the euro area seems to be heading toward a cliff. It may wander back again as it has in the past; Greece's elections could be a nonevent, a recapitalisation plan may emerge with German support, and the ECB may deploy some new salve, along the lines of its €1 trillion bank-lending plan. But the more intense the fight on multiple fronts, the greater the odds of an irreversible break in one line or another.

Spain Is The Most 'Over-Banked' Nation In Europe – ZH

A pick from the EC’s stability report. Too much, too bad.

OTHER

The Art of Balance – iMFdirect

The sharp reduction in China's current account surplus over recent years has ignited a flurry of speculation about whether the world’s second largest economy has achieved the fundamental, economic rebalancing which many have been pressing for.

What to do about debt – Opinion / Reuters

Debt, a little like sex, is a two-sided relationship which, when used appropriately, pleases the partners and is good for society.

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