A boring
day: EURUSD jumping on QE-hope, US stock unchanged, everyone waiting
for Bernanke’s testimony, more earnings results and the next European meeting.
IMF’s reports are probably today’s most important new piece, as what the IMF
thinks, the leaders will eat, courtesy of the “men behind the curtains”, who
feed the leaders. The suggestions are pretty clear: Spanish banks must be
recapped, and no more subordination from “bail-outs” is needed. ECB must ease
its monetary policy by any means. We know Germany will not like this, and as Germany’s constitutional court decided to
push its decision on ESM to mid-September, there are no other choices but the
ECB. Next policy-setting meeting will be on 2-Aug, just over two weeks from
now. What will happen before that? And more importantly, what will happen then?
Markets:
S&P should technically push upwards, but today’s action was lame. The lousy
retail sales figures really should ensure some sort of dove-speak from
Bernanke. EURUSD is range-trading higher, and we will probably see 1.24 soon.
Previously
on MoreLiver’s:
Weekender: Views & Off-Topics my views, Finnish articles,
off-topics
Weekender: Weekly Support weekly reviews and previews (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
3 Month
'Slow' In Stocks As Everything Else Goes Nuts
Debt
crisis: live – The
Telegraph
The Euro
Crisis Blog – WSJ
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
EURO CRISIS
IMF tells eurozone to turn on printing presses – euobserver
Leaders should not pretend to concur on issues
they have not even discussed but should rather initiate a thorough, time-bound
and credible process of discussion among ministers. Markets can be patient if
they are assured that such a process has started in earnest and will deliver
results within a certain time frame.
The 4 Most Disconcerting Charts For European
Equity Holders – ZH
Stocks outperforming credit, stock index
volatility lower than credit volatility, short-term volatility sold.
EURO CRISIS: PIIGS
Above the noise: Why is Italy still being punished? – Saxo
Bank
My view is that Italy, to a large extent, is
still being grouped in the same basket as Spain, Ireland, Portugal and Greece -
albeit judging by the numbers alone its place should perhaps instead be filled
by France.
Given these reports it would appear that Italy is moving towards a
period of political instability. This is certainly not an environment in which
you would expect to see substantial progress on the structural reforms or
maintenance of fiscal austerity. We are yet to see exactly what the Italian
political landscape becomes if Mr Monti does take to the exits, but it is quite
possible that Italy’s politics once again become far more of a concern to the
financial world than the nation’s economy.
Moody’s downgrades Italian banks – Credit
Writedowns
On the heels of a sovereign downgrade, the
following press release was issued by Moody’s Investors Service today in
conjunction with its ratings review of several Italian banks.
Are Rajoy’s Broken Campaign Promises Delegitimizing His Government? – Daily
Capitalist
Concerns over the recapitalization needs of the
Spanish banking system have resulted in sharp declines in the equity market…
Wholesale funding costs for Spanish banks returned to late 2011 highs for both
covered bonds and unsecured debt…
IMF
World Economic Outlook Update – IMF
New Setbacks, Further Policy Action Needed
Global Financial Stability Report Market Update – IMF
Intense Financial Risks: Time for Action
Fiscal Monitor Update – IMF
Nurturing Credibility While Managing Risks to
Growth
IMF 'Bath-Salts' Everything As "Global
Recovery Showing Signs Of Further Weakness" – ZH
IMF forecast: cloudy, risk of lightning – beyondbrics
/ FT
“Emerging markets have not escaped contagion, and are also dealing with home-grown vulnerabilities. Emerging markets are facing extraordinary uncertainty about external conditions impinging on their economic performance.”
“Emerging markets have not escaped contagion, and are also dealing with home-grown vulnerabilities. Emerging markets are facing extraordinary uncertainty about external conditions impinging on their economic performance.”
World Faces Weak Economic Recovery – iMFdirect
A global slowdown – Free exchange
/ The Economist
USA
Retail Sales decline 0.5% in June – Calculated
Risk
Retail Sales Retreat In June For 3rd Straight
Month – The
Capital Spectator
Retail Sales Decline, As Expected – The
Daily Capitalist
OTHER
Things that make you go hmmmm – Grant
Williams via The Trader
Full pdf
Libor Q&A – The Source
/ WSJ
Everything you need to know about the fiscal
cliff in one post –
Wonkblog
/ WP
Surveys Give Big Investors an Early View From
Analysts – NYT
After LIBOR and everything else, is anyone surprised?
China's rates and currency markets indicate more stimulus; the equity market
says that's not enough – Sober
Look
Race To The Bottom: 5 Country’s 10 yr Bond
Rates – The Big
Picture
Global interest rates from 1890 for US, Spain,
France, Swiss and Japan