So, risk-off and "Bad being priced in", as discussed earlier. After a quick drop, S&P bounces off its recent range's bottom, but the Spanish bond yields have also bounced up from the recent rising channel bottom.It looks like the risk aversion has more room to go, but I have no strong feelings now and markets are probably waiting for the eurocrat's roadmap, and then the market reaction to the map, and then the possibility of further central bank action. Everything at play, everything depending on everything.
Earlier on MoreLiver’s Daily:
Weekender: Off-Topic: Alan Turing’s 100th birthday
Weekender: Trading & Markets: one’s profit is other’s mistake
Weekender: Euro Crisis: everything ’at play’
Weekender: Weekly Support: weekly reviews and previews, just
updated!
News – Between
The Hedges
Markets – Between
The Hedges
Recap –
Global Macro Trading
The Closer
– alphaville / FT
Market
Commentary – A
View From My Screens
Tyler’s European Summary – ZH
European
Bloodbath As Merkel Won't Go Dutch
Stocks Slump But Commodities Jump Despite USD
Pump
Debt
crisis: live – The
Telegraph
The Euro
Crisis Blog – WSJ
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
EURO CRISIS
Imagining the Unthinkable The Disastrous
Consequences Of A € Crash – Spiegel
As the debt crisis worsens in Spain and Italy, financial experts
are warning of the catastrophic consequences of a crash of the euro: the
destruction of trillions in assets and record high unemployment levels, even in
Germany. (Google
translation!)
Another
pick from the must-read BIS annua report.
History lesson: the break-up of monetary unions – ASA
What makes monetary union survives? Politics, so it seems, that is not all about economics. Also, you might be surprised to learn that it isn’t the weakest countries that ultimately break the monetary union, rather, the stronger countries.
What makes monetary union survives? Politics, so it seems, that is not all about economics. Also, you might be surprised to learn that it isn’t the weakest countries that ultimately break the monetary union, rather, the stronger countries.
EURO CRISIS: UNION
Political union is transfer union – Fistful
of Euros
Here is the problem: political union is
transfer union, or it is not political union, and anyway, if it is not transfer
union it is no solution. Transfer union is unacceptable. Therefore, political
union is unacceptable
How to design a banking union that will save
the eurozone – bruegel
As soon as the possibility arisis to mutualise
future losses, states will have an incentive to conceal problems. Here, clarity
should prevail.
No more integration without more representation – euobserver
Despite the many calls in recent months for
another great leap forward in European integration, remarkably little attention
is being paid to the EU’s growing democratic deficit.
Soros: How to End the Euro Crisis – PragCap
Europe needs to eliminate the solvency crisis at the sovereign level. You do this by creating some sort of fiscal
entity that essentially guarantees all sovereign debts. Something like a Treasury/Fed relationship in
the USA where you eliminate the odds of a sovereign default by turning a
currency user into a currency issuer.
EURO CRISIS: SUMMIT
What should be expected from EU leaders on June
28–29? 1) For Greece, a Political Deal 2) For Europe, a Growth Compact 3) For European Banks, Steps Toward Union 4) For the European Union, a Fiscal
Union Agenda
What to expect when you’re expecting – BNP Paribas
(pdf)
Research
report dated 25-Jun
Most importantly, the leaders should break the
political deadlock. Germany does not want closer financial solidarity if not accompanied by
political integration. France wants financial
solidarity without closer political integration. Both camps have stuck to their
positions for at least a quarter-century. It is time to bridge the gap between
them.
Don’t Expect Much From EU Summit – UBS’s Weber – MarketBeat
/ WSJ
The whole thing Europe is struggling with is: what will be the amount of sovereignty that will be passed on to the European level in the long-term and what is the short-term solution?
The whole thing Europe is struggling with is: what will be the amount of sovereignty that will be passed on to the European level in the long-term and what is the short-term solution?
EURO CRISIS: PIIGS
The Spanish Bailout, the Eurocrisis & the
myth of Seniority –
Re-Define
If the EU wants to rescue Spain, the trick is
not to remove seniority from the ESM but 1) to remove all uncertainties around
the future of the Eurozone 2) make conditionality more growth friendly 3)
channel the bailout directly to needy banks without going through the
sovereign. (Felix
Salmon / Reuters also comments the article)
The Conclusion Of Another Greek Tragedy – Mark Grant
/ ZH
Cans may get kicked down the road but each
road, every road, eventually comes to an end and I think we are barely inches
now from the end of this road for Greece.
OTHER
Market awaits EU heads of state meeting – Kiron
Sarkar / The Big Picture
Nice short roundup: Australia, Germany, Euro crisis, Egypt…
Five years on – Buttonwood
/ The Economist
BIS: “Central banks need to recognise
and communicate the limits of monetary policy, making clear that it cannot
substitute for those policy measures that can address the root cause of
financial fragility and economic weakness.” In short, central banks are buying
us time. Let's not waste it.
The cruelest month of
the cruelest year –
Free
exchange / The Economist
Banking
crises usually start in September – and also around election years.