Markets
have not moved more after Friday’s rally day. Obviously, European indices are
on the positive side, as US had more time to push higher on Friday and Europe has today catched up. Yields, CDS
prices also remain somewhat unchanged on a similar “extrapolated” measure. The
commentary seems to be cautious on the results of the EU summit. While it is
agreed that at least the result was better than nothing, the something that was
promised or “agreed upon” largely remains a question mark. There are big
issues: Will the ESM be ratified, how will the proposed ECB-banking governance
go ahead, how long everything will take (at least half a year, and a lot can
happen in that time) - and most importantly, where will the money come from.
I am not
big on fighting trends, but would rather not be too much long from current
levels. This week, ECB’s expected rate cut on Thursday and the US independence day on 4-July are the
main true events – in addition to the usual deciphering of European leaders’
statements.
I am
posting this a bit early and will update the regular links as they come online.
In this post plenty on China, and after the summit coverage
writers are now back to commenting on open issues.
Earlier on MoreLiver’s:
Weekender: Weekly Support
weekly roundups and calendars
EU Summit Special all the good ones I’ve found on the
summit
Weekender: Trading & Markets
quant stuff, stock market views etc
Weekender: Off-Topic crime, psychology etc.
News &
Recap – RanSquawk / ZH
Frontrunning
– ZH
The Lunch
Wrap – FT
EM New York
headlines – FT
Overnight
summary – Bank of America / ZH
Today’s
front pages – presseurop
Daily press
summary – Open
Europe
Morning
MarketBeat: Turning Point for Stocks? – WSJ
Broker Note
Briefing – WSJ
Morning
Take-Out – NYT
Currencies
Consolidate Pre-Weekend Moves – Marc to Market
Pre-market
Commentary – Marketwatch
Pre-Market
Trading – CNNMoney
Pre-Market
– NASDAQ
US Equity Preview – Bloomberg
Earnings
& Events – The
Street
MarketCurrents
– Seeking
Alpha
Debt
crisis: live – The
Telegraph
The Euro
Crisis Blog – WSJ
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
EURO CRISIS
Banking union vs. fiscal union and capture – bruegel
There seems to be some convergence on the idea
of (i) a supranational guarantee of deposits to avoid destabilizing bank runs,
(ii) a supranational mechanism to resolve, restructure and recapitalize banks
as well as (iii) the resulting supranational authority to regulate and
supervise banks with the necessary intrusive powers centralized above national
authorities. Yet if these proposals are appealing on paper, they pose at least
three essential political challenges that can easily be overlooked and come back
with a vengeance
Not So
Fast: Finland And Holland Will Block ESM Bond Buying – ZH
http://www.zerohedge.com/news/not-so-fast-finland-and-holland-will-block-esm-bond-buying
http://www.zerohedge.com/news/not-so-fast-finland-and-holland-will-block-esm-bond-buying
What's needed to maintain the risk-on mentality
this week? – Saxo
Bank
General
commentary and weekly review
The Four Paths Forward For The Euro Area – ZH
Goldman: 1) The Cultural Revolution 2) The Long March 3) The Great Leap Forward 4) Disintegration.
Goldman: 1) The Cultural Revolution 2) The Long March 3) The Great Leap Forward 4) Disintegration.
State auditor sounds warning on 2013 French
deficit – Reuters
France will have to find 6-10 billion euros ($7.6-12.6 billion) this year and
a massive 33 billion in 2013 to meet its European deficit targets, or risk
unnerving financial markets, the state auditor told the new Socialist
government on Monday.
Fiscal compact, bailout fund challenged in
German court – euobserver
Six constitutional complaints were lodged in Germany over the weekend against the treaty on fiscal discipline and the
establishment of a permanent eurozone bailout fund. The plaintiffs cite a lack
of democratic oversight and a denting of budgetary powers.
Europe’s Great Illusion – Krugman / NYT
The stakes are very high, and Europe’s leaders are, by and large, neither evil nor stupid. But the same could be said, believe it or not, about Europe’s leaders in 1914. We can only hope that this time is different.
The stakes are very high, and Europe’s leaders are, by and large, neither evil nor stupid. But the same could be said, believe it or not, about Europe’s leaders in 1914. We can only hope that this time is different.
The longer the euro area’s debt crisis drags
on, the more it resembles an instrument of economic torture. Like the medieval
rack, every turn of the crisis tears Europe further apart.
Devalue the Euro? – Bruce
Krasting
If I'm right, after a few weeks things turn
south again in the capital markets.Then what?... Devalue
the Euro by 20++%.... Is this
feasible? I say it is. It has happened twice before in history. In 1985 the
world got the Plaza Accord that devalued the dollar and in 1987 we got the
Louvre Accord that revalued the dollar. In both cases, the global central banks
(CBs) and acted together.
Soviet collapse holds a lesson for the euro – FT
The end of the cold war served as midwife at
the birth of the euro. The grand project of monetary union had been talked
about many times before but it was collapsing communism and German
reunification that produced the final push. Unlike the Soviet Union, the eurozone is not predestined to
collapse under the weight of its own contradictions, but neither is its
survival inevitable.
Why Germany's TARGET2-Based Eurozone
Preservation Mechanism Is Merely A Ticking Inflationary Timebomb – ZH
Goldman’s views
Goldman’s views
if you were Jens Weidmann or the the Bundestag
or Angela Merkel or the German public for that matter, and you were looking at
the chart below of Bundesbank's assets, what would you think?
Revisting the effective exchange rates of the
Euro – ECB (pdf)
EURO CRISIS: SUMMIT
European leaders have finally determined
something that was apparent to everyone for years. Now comes the difficult part: how to
implement a euro zone-wide banking system…Merkel agreed to give up something
she did not have in order to achieve the continuation of austerity requirements
in the southern countries. She agreed
not to press for the two tiered seniority pledge.
EU summit aftermath – MacroScope
/ Reuters
None of the above means that the summit results
should be dismissed, it’s just more of the theme we’ve seen for two years. Germany and others have moved, presumably because they remain deeply concerned,
but incrementally in a way that may bring some calm but in no way gets ahead of
the crisis.
EU Summit: Bono's back from the edge... – Saxo
Bank
The outcome of the EU summit was undeniably a
positive, particularly in comparison to previous summits, but as the dust
settles the markets will have to decide whether the announced measures are
enough. Sadly, in my opinion, they are not.
CHINA
HSBC/Markit China manufacturing PMI shows further contraction in June – ASA
China’s Economy Stabilizing, Latest Data Shows – Forbes
China’s Economy Stabilizing, Latest Data Shows – Forbes
Large and medium steelmakers profits fell
94.26% yoy for Jan-May – ASA
Has China's government bailed
out its debt-laden local authorities? Lesley Curwen talks to Patrick Chovanec,
an Associate Professor at China's elite Tsing-hua University.