Markets are
dull: S&P reached previous lows while EURUSD kept above the 1.20
psychological level (low 1.2050). S&P resistance around 1340, EURUSDU
around 1.2150. Technically, as the direction is down, this bounce should be sold,
but we are at the low end of the recent trading range and there is relatively
little events or news to anticipate, so I have no strong views. QE discussion
seems to dominate, as Eurocrats are leaving their offices for their
well-deserved holidays. I bet Friday will be a heavily directional day.
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
Today’s Asian session started favourably, with
equity markets opening higher and risk currencies holding onto gains made last
night, particularly versus the USD. However, no fresh news or data meant there
was a lack of conviction to push risk higher.
European markets are expected to open mostly
higher Thursday amid rising expectations of further monetary easing from the US Federal Reserve.
Markets await the release of the US Durable Goods Orders,
which is expected to show a decline for June.
Danske Daily – Danske
Bank (pdf)
With only second-tier data on the agenda for today, markets will likely be looking towards
tomorrow’s all-important Q2 GDP data out of the US as this could be instrumental in driving
market sentiment ahead of next week’s ECB and Fed meetings. However, a range of
key earnings reports are on the agenda for today.
Unfortunately for the 'periphery', Germany and the ECB are still not ready to throw caution to the wind
EUROPE
Spanish bailout inevitable, but not necessarily
imminent – economistmeg
The biggest downsides of any bailout are the
strict conditions attached to it, but Spain is already subject to
many of these – including the excessive deficit procedure, which requires it to
commit to deficit and debt targets over the next few years. What conditionality
isn’t already demanded by the European Commission has been imposed by the
markets.
Just to
show how much fantasy there still is: Taking
inspiration from their national team’s victory at Euro 2012, Spaniards must
rediscover what it takes to succeed. Dealt a difficult hand, Spain can overcome its
critical situation only through hard work, responsibility, respect, and
loyalty, thereby ensuring its standing in Europe and beyond.
USA: FED
Examining the Fed’s other policy options – Self-Evident
So what are the “other tools” everyone is
talking about?
QE3 Talk – Stephen Williamson
Bernanke's Dogs – The Short
Side of the Long
Doubts about Quantitative Easing and What they
Mean for the FOMC –
EconoMonitor
OTHER
Morgan Stanley: Impossible for governments to grow
their way back to solvency – ZH
Doing
nothing would sail governments towards the whirlpool of national insolvency –
at some stage. But avoiding insolvency would risk being monstered by recession.