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Friday, June 1

1st Jun - EU Open: Risk-off Ahead of W/E

Here are the morning briefings and select article links. The Chinese data continues to underperform, so at least we can discount the rumors that the hermit kingdom will save Europe. More probable would be that the ESM saves China. US Payrolls coming up today, but the European crisis and the looming weekend with the possibility of surprise announcements are more important now than macro data. What surprises could there be during the weekend? Some relatively hard announcement could come out on how the eurocrats will save Spain this time, so the range of possible surprises is more on the positive side. Nevertheless, my gut feeling is that markets will go risk-off towards the day’s close.

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 recent article on Spain.

IMF: Top borrowers 1. Greece SDR 18.941 bln 2. Portugal SDR 15.946 bln 3. Ireland SDR 13.836 bln 4. Romania SDR SDR 10.569 bln (Alea)
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

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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Danske DailyDanske Bank (pdf)
Sentiment continues to deteriorate in Euroland and US equity markets decline as a response to weaker-than-expected US data and the escalation of the euro crisis. Asian equity markets follow this trend. The Chinese PMI grew less than expected, which added to negative sentiment in the Asian equity markets. The euro remains under pressure against major currencies.

Market Preview: US non-farm payrolls eyedSaxo Bank
European markets are likely to open mostly higher Friday. Markets are keeping a close eye on the US non-farm payrolls data due later toady. Meanwhile, data showed that China's manufacturing activity grew at a slower pace in May.

Morning Briefing: Crisis, what crisis?BNY Mellon
Today we look at some of the more interesting numbers to have emerged from the Euro-area of late.

Breakaway or breakup?
There was a time when Greek exit from the Eurozone seemed implausible – now the prospect is so openly discussed that it even has its own word: Grexit. But amid the media frenzy, we should remind ourselves that single-country breakaway is not the same as a Eurozone breakup. This column discusses the steps to ensure that the former does not imply the latter. It urges leaders to take them quickly.

Hyperbolic Selloff Coming? IMF Discusses Spanish Contingency Plans; Madrid Denies Plans; Hispabonos Dropped From Cabinet DiscussionMish’s
this mess has gotten bigger every step of the way because central banks ignored moral hazard. Indeed, central banks are by their very existence the epitome of moral hazard.

Urban Myths: Greece, Spain Depositors Moving Cash to GermanyAlea

Europe’s banks: The fear factorThe Economist
Preventing a big European bank run

Killing the euro-patient?The Economist
The doctors think the medicine will work, if the euro does not die first

A contrarian momentThe Economist
Share prices in Europe may have priced in the bad news

The Danish Dilemma: What the Euro Crisis has WroughtMarc to Market
The central bank has a single mandate:  maintain the peg.  It has two tools to do so, interest rates and intervention.  Both are being deployed currently.  As the krone rises against the euro, the central bank has cut interest rates both last week and this week.  It has also intervened. 

Spain’s banking system: TeeteringThe Economist
Spain has avoided facing up to its banking problems. Now it has no choice

Spanish woes: Hard poundingThe Economist
Recession, bank crises and fiscal woes all feed on each other
The Greek election: Democracy in actionThe Economist
The outcome is still highly uncertain—as is Greece’s future in the euro

May Employment PreviewA Dash of Insight

The least important jobs report of all timeThe Reformed Broker

China’s FX reserves: the coming peakbeyondbrics / FT
 Nomura has called the top: $3.68tn at the end of 2014, up from a mere $150bn at the start of 2000. China’s reserves will then start to decline, albeit gradually, in 2015.

PMI’s deteriorate
China’s May PMIs look weak from either angle – alphaville / FT
China PMI Plunges Most In 28 Months, Reverts To HSBC's Reality – ZH
Asia today: Manufacturing PMIs echo weak sentiment elsewhere – Saxo Bank
China’s May manufacturing PMI misses estimate – ASA
HSBC/Markit China’s manufacturing PMI falls further in May – ASA
China PMI: action stations – beyondbrics / FT
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