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Monday, July 16

16th Jul - EU Open: Spanish Subordination


Morning briefings + surprise European news from the ECB, good QE piece from UBS and Pictet's monthly report.

Weekender: Views & Off-Topics my views, Finnish articles, off-topics
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News roundup – Between The Hedges
The 6am Cut London – alphaville / FT
Emerging Markets Headlines – beyondbrics / FT

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

Asia today: Bernanke QE hopes lift risk appetite (for now)Saxo Bank
A Tokyo holiday ensured a quiet Asian session with risk currencies locked at slightly higher levels after the strong rebound seen towards Friday's close. Trading with a positive bias was the name of the game though the rally did run out of steam.

Market Preview: Eurozone CPI on tapSaxo Bank
European markets are likely to open in the green Monday ahead of Eurozone CPI data which is expected to show a steady annual inflation rate. Market speculation that China might take measures to boost the economy has spurred investor sentiment.

Danske DailyDanske Bank (pdf)
The empire manufacturing PMI will be watched closely in the market as we await Bernanke’s semi-annual monetary policy report to the Senate tomorrow. The weakness in job growth will keep the Fed alert and we still see a good chance of additional easing.

Morning BriefingBNY Mellon


EURO CRISIS: ECB SURPRISE
ECB Demands Impairment For Senior Spanish Bondholders; Eurocrats ResistZH

What's It Mean?Mish’s

The bail-in Spain — ECB edition alphaville / FT
It’s sunk costs all the way downA Fistful of Euros
So: Ireland’s critical error was to protect legacy bondholders who were completely stuck (the money was long since lent), but now that Ireland made that error, we can’t let Spain come up with a better policy because then there would be questions about Ireland.

Pick The Subordinated Bond OutZH

OTHER
Waiting for directionHumble Student of The Markets
This stock market has been a difficult one for traders and investors alike.

Does QE Really Work? The Evidence To DateZH
UBS: Empirical studies of the effects of the Fed's balance sheet operations suggest that QE designed to address general economic malaise is less potent than a program targeted at a specific market dysfunction.

A Weak Start to Earnings SeasonZacks / PragCap
We have results from only 32 S&P 500 companies at this stage, but what we have seen thus far — in terms of the actual reports as well as the pre-announcements — do not inspire much confidence about the rest of the earnings season…By the end of next week, we will have a much more representative sample to judge the quality of this earnings season, as by then we will have seen results from almost a quarter of all S&P 500 results.

Perspectives July Pictet (pdf)
While the European authorities now have more policy flexibility, Europe’s common resources are still insufficient to meet all the commitments of the over-indebted states. More fundamentally, we see no path towards restoring the competitiveness of the South, whose economies continue to shrink. Their public accounts again show worrying signs of deterioration. The next summit, of the euro finance ministers, takes place on 9 July.

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