Daily US Opening News And Market Re-Cap: June 20

From Ran Squawk:

• Eurozone finance ministers decided to delay any final decision on a new Greek rescue package till July
• Eurozone peripheral 10-year government bond yield spreads widened led by the Greek/German spread
• Late last Friday, Moody’s placed Italy’s long-term “Aa2” sovereign rating on review for a potential downgrade, citing structural weakness, high debt levels and contagion-fears from the Eurozone debt crisis

Market Re-Cap
 
Risk-appetite, which emerged last Friday, couldn’t sustain its momentum today after Eurozone finance ministers decided to delay any final decision on a new Greek rescue package till July. The decision led to a re-emergence of risk-aversion, which provided support to the USD-Index and in turn weighed on EUR/USD and GBP/USD. The ongoing Greek debt concerns once again weighed on equities, with particular underperformance seen in financials, which underpinned the strength in Bunds. Allied to this, Eurozone peripheral 10-year government bond yield spreads widened led by the Greek/German spread.
 
Looking forward, the economic calendar remains thin, however any further developments related to Greece will be closely watched. In fixed income, there are two Fed’s Outright Treasury Coupon Purchase operations in maturity ranges of Aug’18-May’21 and Dec’13-May’15, with a purchase target of USD 4-5bln each. A few ECB speakers are also scheduled to speak later in the session, with ECB’s Trichet testifying before EU’s Parliament Economic and Financial Committee at 1530 BST.
 
Asia Headlines:
 
Executives of the ruling Democratic Party are set to visit PM Kan and urge him to resign soon. (Kyodo News)
 
In other news, China is likely to raise interest rates within the next 10 days as price pressures encourage the government to end the longest pause since increases began in October, Nomura said. (Sources)
 
Also, China’s reserve requirement ratio is close to the limit and there won’t be such frequent increases in the H2 2011 compared to H1 2011, according to a researcher Chenghui at the State Council’s Development Research Centre. However China may consider lowering the reserve requirement ratio for banks to boost lending to SME’s, while raising interest rates to curb inflation according to a researcher. (Securities Daily/ Ming Pao Daily)
 
US Headlines
 
Congress and the White House could raise the US debt limit for a few months while they seek a comprehensive, long-term budget deal, according to Senate Republican leader Mitch McConnell. (RTRS)
 
Elsewhere, Russia’s President said that his country will likely continue lowering its US debt holdings. (WSJ)
 
EU and UK Headlines:
 
Eurozone finance ministers agreed that they would seek voluntary rollover of Greek debt by private bondholders to finance a substantial part of Greek funding needs in coming years. Ministers agreed that the required additional funding will be financed through both official and private sources and welcomed the pursuit of voluntary private sector involvement in the form of informal and voluntary roll-overs of existing Greek debt at maturity for a substantial reduction of the required year-by-year funding within the programme, while avoiding a selective default for Greece. They said the disbursement of the next EUR 12bln tranche of emergency funding to Greece would take place by mid July, if the Greek parliament passes key laws on the fiscal strategy and privatisation. Eurozone finance ministers decided to define by early July the main parameters of new funding strategy. (RTRS)
 
Also, German finance minister, Schaeuble, said participation of private creditors has to be voluntary to avoid a credit event, adding that Greek vote on Tuesday can pave the way for payout of the next tranche. He further said that the ECB has own responsibility, and has strong interest in avoiding large damage. (RTRS)

• Eurozone Current Account SA (EUR) (Apr) M/M -5.1bln vs. Prev. -4.7bln (Rev. to -3.0bln)
• Eurozone current Account NSA (EUR) (Apr) Y/Y -6.5bln vs. Prev. -3.8bln (Rev. to -2.0bln)
• Rightmove House Prices (Jun) M/M 0.6% vs. Prev.1.3%;
• Rightmove House Prices (Jun) Y/Y 1.1% vs. Prev. 0.7%. (RTRS)
• German 9-month Bubill auction for EUR 1.4bln, bid/cover 3.80 vs. Prev. 2.20 (yield 1.2985% vs. Prev. 1.178%) (RTRS)

Full report:

Daily Us Opening News 6.20

Comments

[topcallingtroll]

This is of course a win for the usa. It gives us more breathing room.

All in all I would rather Berskanke monetize than congress increase deficit spending.

That way the money is stolen from current suckahs such as mercantilists abroad rather than our children

[Manzilla]

Holy copper volume batman!