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Daily US Opening News And Market Re-Cap: June 17
From Ran Squawk
- Market talk that a new Greek aid package could be worth as much as EUR 150bln against a previous estimate of EUR 120bln
- German Chancellor Merkel and French President Sarkozy demonstrated a united front in their approach to tackle the Greek problem
- German chancellor Merkel said she wants involvement of private creditors on a voluntary basis, and wants to work with the ECB on investors’ role in Greece
- French President Sarkozy said that we have found an agreement on the private sector involvement on Greece, in line with the Vienna initiative
Market Re-Cap
Ongoing uncertainties surrounding the Greek debt situation, allied with signs of an apparent slowdown in the global economic recovery promoted risk-aversion in early European trade. However, in a stark reversal, risk-appetite re-emerged following market talk that a new Greek aid package could be worth as much as EUR 150bln against a previous estimate of EUR 120bln. Allied to this, German Chancellor Merkel and French President Sarkozy demonstrated a united front in their approach to tackle the Greek problem, whereas markets also observed a re-shuffle of the Greek cabinet, which brought further positive sentiment. As a consequence, the USD-Index ventured back in negative territory, in turn providing support to EUR/USD and GBP/USD. European equities pared back earlier losses, as financials advanced, and the Italian FTSE MIB and the Spanish IBEX 35 indices outperformed their European peers. Strength in equities weighed on bunds, and European peripheral 10-year government bond yield spreads narrowed.
Moving forward, markets look ahead to economic data from the US in the form of University of Michigan confidence and leading indicators. In fixed income, Fed's Outright TIPS purchase operation in the maturity range of Apr'13-Feb'41, with a purchase target of USD 1.5-2bln is also scheduled.
Asia Headlines:
BoJ’s Deputy Governor Nishimura did not repeat his proposal for further monetary easing at the central bank’s policy meeting on May 19th-20th because he saw few signs of a further worsening in sentiment, minutes of the meeting showed. Another Central Bank member said a need for easing remains but should mull best timing, few members said the risk of sentiment worsening remains, and one member said downward pressure on the economy is potentially big. (RTRS)
Global Headlines:
China’s vital interests are at stake if Europe cannot resolve its debts crisis, the Chinese Foreign Ministry said. Vice Foreign Ministry Fu Ying, made it plain that China had tried to help Europe overcome its troubles by buying more European debt and encouraging bilateral trade. (RTRS)
In other news, former Fed’s Chairman Greenspan said a default by Greece is almost certain and could drive the US economy into recession. (Sources)
US Headlines
Vice President Biden said he and a group of US lawmakers trying to hash out a deficit-reduction plan are determined to find USD 4tln in savings and prove to financial markets around the worlds that the government is serious about tackling the nation’s debt. (Sources)
In other news, Fed’s balance sheet expanded to USD 2.811tln in the week ended June 15th from USD 2.795tln the prior week. Also, foreign central bank’s overall holding of US marketable securities at the Fed rose USD 10.74bln in the week ended June 15th to stand at USD 3.457tln. (RTRS)
EU and UK Headlines:
German chancellor Merkel said she wants involvement of private creditors on a voluntary basis, and wants to work with the ECB on investors’ role in Greece. She further said that she will do everything necessary to protect and stabilise the EUR. She also said that we are not talking about September for a Greek aid deal, however there is work to be done. (RTRS/Sources)
Also, French President Sarkozy said France and Germany have the same position on Greece and EUR, adding that a Greek deal needs to be agreed in accordance with the ECB. Sarkozy also said that we have found an agreement on the private sector involvement on Greece, in line with the Vienna initiative. (RTRS/Sources)
In the short-end, Short Sterling (Sep'11) has risen after further investment banks (UBS/RBS) pushed back their call for the first UK rate hike to February 2012 from previous estimates of an August move. Separately, front-month Eurodollar futures have also seen some relief on the back of the apparent consensus between Germany and France on how to proceed on the issue of Greece reversing some of the pressure that has been observed over the past few days.
• Eurozone Trade Balance SA (EUR) (Apr) M/M -2.9bln vs. Exp. -2.7bln (Prev. -0.9bln Rev. to -2.2bln)
• Eurozone Construction Output SA (Apr) M/M 0.7% vs. Prev. -0.3% (Rev. to -0.1%) (RTRS)
Full report:
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This might be pretty big today. http://www.bloomberg.com/news/2011-06-17/senate-ethanol-vote-signals-ill-wind-for-other-energy-subsidies.html
I will add to why this is important. Here is proof of serious inflation. The amount of money spent lobbying in a down economy is no longer having its desired effect of securing your congresspersons vote. You are now looking at spending a lot more to keep your industry at the trough, it is an election year after all....
Vancouver rioter hit in the nads with a flash-bang. heh.
http://www.youtube.com/watch?v=CUQZW6YetjE
ht AOSHQ
http://www.youtube.com/user/zedgehero
Weekly news update -This week -Anonymous hackers, Chinese Protesting, Arab update, and Tiannamen Square dedication.
Still lots of buying pressure in Europe.
All the major indices tested lows, and on discovering there were no more sellers, all those buy-the-dippers, who were frothing at the mouth, have come in buying with a vengeance.
Looks like it could become a major reversal day. Up till now it can be classified as a trend day so far.
This on a Friday coming into a weekend fraught with fear.
Very bullish if things hold.
U.S. futures are setting up for a professional gap and go day higher.
Stay sharp.
Very bullish, like everything else now days. Printing money is bullish, economies in recession is bullish, bailing out the bankrupt is bullish, Sarkosy gets a blow job is bullish....buy, buy, buy for fake sakes, what the fuck are you waiting for Bernanke and the money printers have got your back.
//rant over
Europe has been using the resource and populated regions of the world to fund their profligacy for centuries. Just as the US is running out of gas, they now focus on China as their new champion. Tossed aside, the dry husk of American production can now whither.
From third world colony to first world colony to third world colony. America, you aren't very bright.
And if we wait 2 more weeks it's 180 billion.
I sure do love this soap! THESE WHERE THE DAYS OF OUR CAPITALISTIC LIVES
Followed by Rations
How the fuck can you trade this FUCKING MARKET when it is totally and untterling maniplulated. It is no longer a free market and anyone he thinks it is is an asshole. I'd like to break the bailout off in their fucking asses. This is the opposite of what is suppsed to happen. The market is supposed to trade on the future not the present. The future with continal bailouts is fucking serfdom. FUCK.
Just in the nick of time, Europe presents a "united front" on the bailout package. Bunch of fucking criminals.
A.K.A. a stick save. But I don't think that Angela's sheeple will stand for it past the weekend. Unless they are turning Irish.
Yip,
The market is a "discounting mechanism" whose forward view, instead of being 6 months, is about 6 hours. Welcome to the Pachinko machine. We are in the last phase of the market's integrity being entirely destroyed, which is followed by the evacuation of all who hold positions within it.
As for those bailouts, that is the kleptocracy in action, and it works until the Greeks just burn parliment to the ground. Personally, I'm more disappointed in the Irish...who should have long ago kicked some ass.
Stocks up
Oil down.
Gold down.
Perfectly choreographed day for TPTB during OpEx.
Unless gold can get a bid, I doubt stocks are going to do much other than run back up to the top of the channel.
And right now, the XAU is hands down the worst performing sector on the planet, not a good sign for risk assets.
Monday morning, we'll be back to clamoring for more U.S. Dollars and Bonds again, driving the 10-yr. yield down to 2.5% by the end of the summer.
look at a chart of abx deflated by the price of gold. it's a good measure of equity investor sentiment towards the sector. right now its trading at the march 2009 lows....
i'd say thats a very good sign for risk assets.
in six weeks
dow -1000
ten year yield down 70bps near 20%
oil down $20
housing starts rising housing permits big jump
huge pickup in refi
if youre short here u are betting that tptb are too scared to paper over greece and would rather crash the financial system which they own and operate.
best of luck
...and then you woke up.
Selling into today's "strength" will be the mantra for the SMARTS! Politicians only think for themselves yet this is already too late...for Greece! Place your bets accordingly!
Joe....Only true if you can predict when the next 'bailout' will be. Could be the day to buy, who knows. Over the weekend they could have an 'emergency' session and by monday we could have another couple billion, opps I mean trillion, added to the market to hold it up. It's a fools errand and a guessing game.
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