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Monday, June 18

18th Jun - US Close: S&P and Spain


Even though S&P and Spain both start with the same letters, today's markets were strange. Another US session rally, after rejecting a support line earlier. Technically S&P looks like it is "breaking up", perhaps anticipating a policy response from the FED. We are in "annoucement game"-regime (=range trading), both currency- and credit markets are in a risk-off-mood, but technically stock market looks like it is going to go higher.  Mixed feelings...

The next big issue will be the Spanish bond auctions and the FED meeting.  I will update the Calendar later today, and think of something interesting to say. For Greece, see the updated Greece Election Results


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Markets – Between The Hedges
The Closer – alphaville / FT
Market Commentary – A View From My Screens
Tyler’s European Summary – ZH
  What Do FX And Bond Traders Know That Stocks Don't (Again)?
Tyler’s US Summary – ZH
  Credit Slumps But VIX Dump Drives Equity Pump

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

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EURO CRISIS
Deconstructing the EurozoneDavid Kotok / The Big Picture

NYT Misidentifies Main Cause of Slow Motion European Bank Runnaked capitalism

Why I'm betting big on EuropeFortune
The vaunted international stock picker David Herro is betting big on banks in France, Spain, and Italy. But he doesn't call himself a risk-taker.

Euro Struggling, Deja Vu All Over Again, Except...Marc to Market

Egan Jones’s Egan Not Confident About Europe’s DebtBB (mp3)

EURO CRISIS: ECB
ECB battens down the hatchesMarketWatch
Amid the narrowest of victories for Greece’s New Democracy party and ahead of much financial market nail-biting, the ECB is battening down the hatches. All this is taking place as the ECB under new president Mario Draghi, firmly but discreetly, is redrawing its contours of operation to adapt to a new, unforgiving future.

The ECB’s Greek Bond Holdings and what the ECB could doTF Market Advisors

Pimco’s Richard Clarida Says ECB to `Ease’ on July 5BB (mp3)

EURO CRISIS: GERMANY
Spain May Not Be Uganda, But Germany Is ChileZH
Germany's credit risk has risen by almost 50% in the last 3 months to record highs

Bill Gross: ‘Germany to Me Is a Credit Risk’MarketBeat / WSJ

World Turns to Unwilling Germany to Save the EuroSpiegel
The euro is in trouble and only Germany can fix it. That appears to be the consensus as Chancellor Merkel attends this week's G-20 summit in Mexico. So far, she has stubbornly opposed most crisis solution proposals coming from Brussels. But the risks are now so great that she may soon have to backpedal.

Between two nightmaresThe Economist
Angela Merkel is drawing the wrong lessons from the chaos of German history

EURO CRISIS: SPATALY
Spanish "Litigation Arb" Trade Is The New Killing ItZH
sell the domestic law, buy the foreign law.

Italy-Spain spread reaches a record as Spain's fiscal problems come into focusSober Look
market participants' view is that even though Italy has more debt to roll, Spain's issues are more extreme - particularly the banking sector. The market views the recent announcement of Eurozone's support for Spanish banks as lacking in detail and insufficient in size. Many view Spain's property market bubble as dwarfing that of Italy.

The Weekender: Enhancing the Spanish program - A new Greek programbruegel

Subordination is not the main issue in Spainbruegel
The main driver of the yield increase is the increase in the absolute debt level due to the assumption of private sector debt by the government.

As Italy Hints Of Subordination, Did Rome Just Request A "Semi" Bailout?ZH

OTHER
The Swiss franc: proving a fundamental trilemmaalphaville / FT

Three Charts Your Stockbroker Won't Want You To SeeZH
 
Cameron Takes Dig at Argentina at G-20The Source / WSJ

Dithering in the darkThe Economist
Quantifying the effect of political uncertainty on the global economy

Finance blogger wisdom: a recapAbnormal Returns
In case you missed these in my Weekender-post…

Emerging Markets Briefer - June 2012Danske Bank (pdf)

FOMC preview: twist and shoutDanske Bank (pdf)

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