Spanish bond yields near euro-era highs, and above 7%. Consumer credit is expanding in the US, and the chart looks like the trend has finally reversed. This is providing some hope to the markets - while the FED talk on possible further QE is mixed. Tomorrow the Germany's Supreme Court makes a decision regarding ESM - the rescue vehicle is either postponed until further inquiries, or it will be allowed to proceed as agreed. Of course, ESM will not help much and will definitely not end the crisis.
Earlier on
MoreLiver’s:
Sell-Side Research (GS, Citi, CS...)
Weekender: Trading & Markets (incl. my views)
Weekender: Weekly Support (just 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 US Summary – ZH
Dismal
Equity Volume Day As Gold And Treasuries Surge
Debt
crisis: live – The
Telegraph
The Euro
Crisis Blog – WSJ
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
EURO CRISIS
Mapping The EU Summit Political Maneuvers – ZH
JP Morgan’s
funny, sad and true piece
Unthinkable, Predictable Disasters – reason
The disintegration of the euro, like America’s entitlement bomb, is both unfathomable and inevitable.
The dollar-euro repo arb?… Not yet – alphaville
/ FT
Barclays: Converting euros into dollars in order to purchase higher yielding assets is still expensive. The 3m cross currency basis remains more than 50bp. Moreover, the European institutions may prefer to stay in euros because their obligations and liquidity needs are in that currency.
Barclays: Converting euros into dollars in order to purchase higher yielding assets is still expensive. The 3m cross currency basis remains more than 50bp. Moreover, the European institutions may prefer to stay in euros because their obligations and liquidity needs are in that currency.
Foreign
exchange reserves on the rise, short end of the yield curve negative.
The German Constitutional Court is expected to rule Tuesday July 10 on the request for a temporary
injection against the ESM and the fiscal pact
Bond Market Still Waving Red Flags – MarketBeat
/ WSJ
The bond markets have been waving red flags for
years. But the combination of three government bond markets in particular, Spain, France, and the U.S., are notable
European Credit versus volatility looks
increasingly appealing – Macronomics
On current relative valuations long credit vs
long equity volalitility positions look particularly interesting.
Pimco’s El-Erian Says ECB Can Only Provide a
`Bridge' – BB (mp3)
De Grauwe Says ECB Acts Like Its in `Suicide
Mode’ – BB (mp3)
QE
Can More QE Juice Stocks? Think Again – MarketBeat
/ WSJ
In separate remarks on Monday, a couple of Fed
chieftens offered differing views on the best course of action the central bank
should employ to stimulate the economy.
A strong push for QE3 from FOMC member – Calculated
Risk.
Fed's Williams: Unemployment above Target,
Inflation below Target, QE3 "most effective tool"
QE1-2 Operation Twist(s) Market Impact – The
Big Picture
Nice chart:
Every subsequent Fed intervention seems
to have a diminishing impact on risk assets and equity markets.
Most of it points toward quantitative easing,
but with a caveat: In general, we are
getting a rehash of already stated views, views that should have pointed in the
direction of QE3 at the last meeting.
Global Central Bank Put In All Its Visual
Glory – ZH
JP Morgan’s
piece: Balance sheet expansion has been
confined to Europe in the past six months, headed by the SNB, then the BoE and the ECB. The Fed
and the BoJ have sat on their hands. This divergence remains a fundamentally
positive force for the dollar and yen against European currencies.
STOCK MARKET
Q2 Earnings Trends – Some Worrisome
Developments – PragCap
The key point is that earnings growth is
slowing substantially, margins have likely peaked, and without a boom in
investment or a surge in government spending the risk lies to the downside (via
Zacks)
The Hope-To-Reality Gap – ZH
Either we are about to see a surge in economic
data back to positive surprises or the S&P 500 faces a rude reality.
OTHER
The "B" Suffix – Macro-Man
Everything
is bollocks – LIBOR, Euro, China, CHF…
What’s In A Name? – Bill Gross /
PIMCO
Not only banks and insurance companies but
sovereign nations as well cannot all be counted on to guarantee a return of
principal, let alone a return on investment. An authentic debt crisis – which
the world is now experiencing – can only be ultimately cured in two ways: 1)
default on it, or 2) print more money in order to inflate it away.
Credit
creation in US is up, while it is down in Europe.
Why Capital's Defeat of Labor Means Fat Profit
Margins Are Here to Stay – Minyanville
The end of the age of consumption and the
decreasing need for labor are intertwined, and we have just begun to come to
grips with this.