EURUSD did not "like" 1.20-level just yet, and rebounded toward the previous low-area around 1.2150, failiing and now looking like another try at the lows is coming. SPX bounced from the channel (or flag, whatever) bottom. Still waiting for a European policy response. Key event will be the Spanish debt maturity coming up - as they will have hard time rolling it, someone needs to help them (ECB? rescue vehicles?), or Spain is in for a fast meltdown.
Previously on MoreLiver’s:
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
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
The China flash PMI improved to 49.5 from 48.2, the
first improvement in 3 months and the highest reading since February. Risk
currencies attempted a rebound, but the move was not convincing. EURUSD only
managed a 10-15pt rally before retracing. (China PMI: see also ASA,
ZH,
GMM,
BB,
markit
press release)
European markets are likely to open mixed Tuesday. Markets await the
release of manufacturing & services PMI data across Eurozone.
Additionally, investors are eyeing the Troika official's visit to Greece
and Spanish bond auctions.
Danske Daily – Danske
Bank (pdf)
Focus today will continue to centre on
developments in the Spanish sovereign bond market. It will also be interesting
to see the reaction in German and Dutch bonds after the move from Moody’s.
The crisis in Greece is building again
EURO CRISIS: SPAIN
Ultimately, the Spanish bailout of the
financial sector postpones the problem a few years into the future
What exactly will be the mechanism to effect a
Spanish sovereign bailout? – Credit
Writedowns
I would suggest the only real possibility to
save the euro from complete collapse is the ECB stepping in. And by stepping in
I mean giving a backstop beyond mere monetisation. Short of this, the euro zone
will fail and Spain (and Italy) will default. This will be apparent in a short period of months.
Spanish Finance Minister in Germany Pleads for Temporary Credit Line to Halt an "Imminent Financial
Collapse" – Mish’s
For starters, when it comes to these bailouts,
there is no such thing as "temporary". Regardless, I believe Germany will reject the request, thereby forcing Spain into a full sovereign
bailout.
Spain is battling to avert a fully-fledged
sovereign rescue after borrowing costs spiralled out of control, with dangerous
knock-on effects in Italy and Eastern Europe.
OTHER
World’s Ugliest Chart Contest – Global
Macro Monitor
The stock
markets are not looking really hot.
Q3 FX Outlook: Back to the strong USD future – Saxo
Bank
In Q3 Europe will have many questions that may
remain unanswered and this could keep the Euro on the defensive, while the USD
is likely to thrive together with the Scandies. Commodity currencies may be the
dogs of the G-10 on weak growth worries.
Q3 Market Comment: Denial or change? – Saxo
Bank
So far, the EU has remained embedded in the
first and second phases of the crisis: denial and protest. The third phase,
Mandate for change, will hopefully arrive soon because delaying it would be the
ultimate form of denial.
Q3 Macro Outlook: 2011 Déjà vu – Saxo
Bank
Although the Asian slowdown has ensured that
this year is not an exact replica of last year the similarities are aplenty.
The US is seeing renewed calls for a recession, while the Eurozone is
teetering on the brink of it and China faces lower growth.