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Monday, September 24

24th Sep - US Open: Quad'it? + Views

The plans to leverage the ESM seem very strange. Just by planning this they are de facto announcing that the current measures are not enough - but that part we knew already. Leveraging the ESM makes it certain that a large part of the paid-in ESM capital will be spent in the eventual debt restructurings. So is the idea making everyone a single-A country in Europe, while simultaneously ensuring that the competitiveness never comes back? The politicians will get burned in the elections real bad. There is too much debt. Moving it from one pocket to another will not help - and they ought to understand this. The eurocrats are delusional.

Kuvittelen tämän Merkelin suuhun. Muuten en keksi, mikä helvetti Suomea vaivaa:

"Jos lopetatte vastuunkannon ja lähdette eurosta, me käsketään meidän pankkien ja vakuutusyhtiöiden dumpata kaikki Suomen valtion velkakirjat. Lisäksi huolehditaan, että Suomen TARGET2-saatavat eurosystemistä neuvotellaan pitkään, hartaasti ja epäedullisesti teidän kannalta.
Me ei kohtuuttomia vaadita. Vedätte vaan Suomen vastuut ja velat keskimääräiselle EU-tasolle, tonne 90 prosenttiin BKT:stä. Ne, jotka nyt teistä lähtee tähän mukaan, palkitaan ruhtinaallisesti."

If it ain’t broke, don’t fix it. If it is broken, Fixit. – MoreLiver

SPX still in a channel, no news there. Feeling slightly toppish, and we might see tests of the support levels. The QE is over now, and a delayed "sell the news" would make perfect sense and technically not even change the current bullish picture, as long as the channel holds (no penetration of 1420). One possibility is that the horizontal congestion we saw in August is replayed, and after another week of not going anywhere, the markets could simply break higher. I don't see any clear events that could cause this - except solving the Greek question (kick or support).
The hourly chart clearly shows the trading range. Buy low, sell high :)

EURUSD seems weaker than the SPX, and spending the early part of the week in a 1.2950-1.2850 range seems probable. Please remember that the EURUSD rallied fast - and more than SPX - after the ECB and US QE news. In a way the current slow crawl lower is "coming back in line". The rest of the week will see Spanish horrors (possible bailout request, report on the banks), so further weakness sounds a good bet. There are no obvious downside targets, so I have no strong views now.
Previously on MoreLiver’s:
22.9. Disregard This Post (links to euro breakup analysis)
21.9. Weekender: Weekly Support (weekly reviews and previews)

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Roundups & Commentary
US Opening News And Market Re-Cap – Ransquawk / ZH
Frontrunning – ZH
Overnight Sentiment – ZH
The Lunch Wrap – alphaville / FT
Emerging N.Y. headlines – beyondbrics / FT
Today’s front pages – presseurop
Daily press summary – Open Europe

Morning MarketBeat: Stocks’ Consistency Continues – WSJ
Broker Note Briefing – WSJ
Morning Take-Out – NYT
AM Dear Dairy: Kickoff – Macro and Cheese
Drivers in the New WeekMarc to Market
ESM to be leveraged?Kiron Sarkar / The Big Picture

US session ahead
Pre-market Commentary – Marketwatch
Pre-Market Trading – CNNMoney
Pre-Market – NASDAQ
US Equity Preview – Bloomberg
Earnings & Events – The Street
MarketCurrents – Seeking Alpha

TV: Bloomberg, BBC
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

You're Dreaming If You Think The Euro Crisis Is Resolved The Automatic Earth
The fate of the continent and its people is presently in the hands of a group of bankers, technocrats and delusional politicians. That fate needs to be clawed out of those white-knuckled fingers, and fast, or we will see a lot of blood in the streets.

European Sovereign Debt Crisis: Up Next, a German Real Estate Bubble?CFA Institute

Greek troika soap operaalphaville / FT

Meanwhile, in the Far NorthOpen Europe
With a majority of voters from all Finnish parties - apart from the small Swedish People's Party - seemingly opposing more eurozone bailouts, expect Finland to remain assertive. Starting with the rumoured leveraging of the ESM.

German confidence not bottomed out yetNordea
German IFO business confidence falls unexpectedly in SeptemberASA
IFOnly Germany could avoid a recessionalphaville / FT

Gramm and Taylor Don't Get ItTim Duy’s Fed Watch

Pettis: How to be a China bullMacroBusiness
what a bullish argument on the Chinese economy must accomplish in order to be credible

“Stimulus” continued to be announced in China, but no one feel anythingASA

FX Comment: as long as we trustNordea

Not time to get nervous (yet)Humble Student
Very nice technical overview of the major stock markets.

Equity Review: Negative sentiment to get worse?Saxo Bank

Stocks have outrun expectations by a wide marginSaxo Bank

(this one was posted in today's earlier post, but just a reminder)

Morning Briefing (EU/US): Happy MondaysBNY Mellon
Summing up the state of play in Greece.