Google Analytics

Monday, July 16

16th Jul - US Close: IMF "bad cops" ECB

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)

Follow ‘MoreLiver’ on Twitter or Facebook
Markets – Between The Hedges
The Closer – alphaville / FT
Market Commentary – A View From My Screens
Tyler’s European Summary – ZH
  European Bank Spreads Jump To Worst Of Year
Tyler’s US Summary – ZH
  3 Month 'Slow' In Stocks As Everything Else Goes Nuts

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

IMF tells eurozone to turn on printing presseseuobserver

To rescue Europe, our leaders need a new sense of resolvebruegel
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 HoldersZH
Stocks outperforming credit, stock index volatility lower than credit volatility, short-term volatility sold.

Audio: Mauldin Says France to Be `Real Problem' in Euro CrisisBB (mp3)

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.

Italy’s political riskMacroBusiness
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 banksCredit 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

Spain’s banks are IM-F’dalphaville / FT
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…

World Economic Outlook UpdateIMF
New Setbacks, Further Policy Action Needed

Global Financial Stability Report Market UpdateIMF
Intense Financial Risks: Time for Action

Fiscal Monitor UpdateIMF
Nurturing Credibility While Managing Risks to Growth

IMF 'Bath-Salts' Everything As "Global Recovery Showing Signs Of Further Weakness"ZH

IMF Says Japan And Spain Are Done, "Debt Ratio Will Never Stabilize"ZH

IMF forecast: cloudy, risk of lightningbeyondbrics / 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.”

World Faces Weak Economic RecoveryiMFdirect

The IMF, raining on Britainalphaville / FT

A global slowdownFree exchange / The Economist

Goldman Cuts Its Q2 GDP Estimate Again To 1.1%, Just Above "Stall Speed" ZH

Retail Sales decline 0.5% in JuneCalculated Risk
Retail Sales Retreat In June For 3rd Straight MonthThe Capital Spectator
Dismal US Retail SalesMarc to Market
Retail Sales Decline, As ExpectedThe Daily Capitalist

Things that make you go hmmmmGrant Williams via The Trader
Full pdf

Libor Q&AThe Source / WSJ

Everything you need to know about the fiscal cliff in one postWonkblog / WP

Surveys Give Big Investors an Early View From AnalystsNYT
After LIBOR and everything else, is anyone surprised?

China's rates and currency markets indicate more stimulus; the equity market says that's not enoughSober Look

Race To The Bottom: 5 Country’s 10 yr Bond RatesThe Big Picture
Global interest rates from 1890 for US, Spain, France, Swiss and Japan

Follow ‘MoreLiver’ on Twitter or Facebook