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Thursday, June 21

21st Jun - EU Open

See last night’s US Close: Mini-Twist for more article links, I also just updated the FED Watch with “after”-links.

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News roundup – Between The Hedges
News roundup – The Trader
Emerging Markets Headlines – beyondbrics / FT
The 6am Cut London – alphaville / FT
Press digests by Reuters: FT, WSJ, NYT

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

Market Preview: Lower open for stocks on FOMC Saxo Bank
European markets will open lower Thursday in sympathy with other global markets after the FOMC didn't deliver the hoped for stimulus to he US economy. On the day, attention will be on Eurozone PMIs and the French, Spanish and UK bond auctions.

Danske DailyDanske Bank (pdf)
Twist but no shout – Fed delivers slightly less than markets had expected. Operation Twist has been extended to year-end but the bar is low for further easing. Stocks closed with only minor losses in the US, Asia mainly lower. Spanish bond spreads narrowed significantly, focus on todays auction. Chinese manufacturing PMI falls to 48.1.

Morning Briefing: Gold, the Euro-zone and the FOMCBNY Mellon

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What’s So Special About the Euro Currency Area?View / BB
The real problem, of course, is that the euro area was always a political ideal designed to constrain
Germany’s imperialist tendencies and prevent World War III. To a certain extent, the economic justifications were just that, nothing more. Throw in the fact that Europeans don’t want to relinquish their sovereignty and become a United States of Europe, and it’s clear why Europe is in such a muddle. How will it end? Badly -- and unfortunately not anytime soon.

Merkel Balks at Sovereign Debt Purchases to Overcome CrisisBB
Merkel’s non-committal stance on the measure opens a fresh conflict as euro finance ministers meet today and Italian Prime Minister Mario Monti hosts a four-way summit in Rome tomorrow.

The Eurozone: Choked by an accounting
Is austerity in the Eurozone doomed to fail? This column argues that Eurozone governments have to acknowledge that their response to the sovereign crises has been wrong. Bringing budgets back to balance as quickly as possible and at any cost for growth is a recipe for disaster.

Cheat sheet for Europealphaville / FT
What can Europe do? SocGen has a handy little chart

Can the rest of Europe stand up to Germany?Opinion / Reuters
Germans will almost certainly support the political concessions that might give the euro a chance of survival, including fiscal transfers and some mutualization of debts, once they realize that their only alternative is isolation from the rest of Europe. But before they agree to a European Germany, voters may need to be reminded that trying to create a German Europe always leads to disaster.

Saving the EuroEconMatters
The management of the eurozone debt crisis is dysfunctional. In our assessment, to save the Euro currency, policy makers must focus on competitiveness, common sense and communication. If policy makers strived to achieve just one of these principles, the Euro might outshine the US dollar.

Crisis has barely begun, says GLG hedge fund managerReuters
The global financial crisis has barely started and is likely to last for at least another 15 to 20 years as major economies cut debt levels, according to Jamil Baz, one of Europe's most prominent hedge fund managers.

Berlusconi Casts Doubt on Austerity Plan WSJ
Former Prime Minister Silvio Berlusconi warned that his conservative party was bleeding voters by supporting unpopular austerity measures, raising the specter that Italy's biggest party might pull support for the country's technocrat government before its term's scheduled end next spring

Rompuy Blueprint Said to Include Options on Debt, Bank OversightBB
discussion of jointly issued short-term bills, a debt- redemption fund and common banking supervision, according to two officials familiar with the work on the project. The findings will be presented to EU leaders in Brussels next week

China manufacturing PMI signals further contraction in JuneASA

7-Month Low, Sharpest Decline in New Export Orders Since March 2009Mish’s

China Manufacturing Slump May Match That of 2008 CrisisBB

Markets Losing Hope After China PMI Hits 7 Month LowZH