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Euro Jumps, Risk Is Bid, Following Strong Spanish Bond Auctions, Trichet Promises For EU Finance Ministry

Tyler Durden's picture




 

Risk is solidly bid this morning as the EURUSD has jumped to overnight highs of just under 1.45, and the DXY has just dropped to a one month low, following two Spanish bond auctions which saw yields surge yet came at far higher bids to cover than previously. From Reuters: "Spain saw strong demand for 3.95 billion euros ($5.67 billion) of medium-term bonds on Thursday, though a broad drop in risk appetite and lingering uncertainty over how talks on fresh aid for Greece will pan out kept yields high. In a litmus test of investor appetite for peripheral euro zone debt as policymakers thrash out a plan to avert a Greek default, the 2014 bond, with a 3.4 percent coupon, sold 2.75 billion euros at an average yield of 4.037 percent. That compared with 3.568 percent at the previous auction in April, while the bid to cover rate rose to 2.5 compared with 1.8. The 2015 bond, last issued in September of last year and with a coupon of 3 percent, sold 1.2 billion euros at an average yield of 4.230 percent, slightly lower than yields on the secondary market. The bond was 2.9 times subscribed after being 1.6 times subscribed at its last auction. "Since the (2014) launch early April, we've had an escalation on the peripheral side, so a firm selling since then, which is why (the yield) jumped so much," economist at 4Cast Jo Tomkins said. "You'll see plenty of buyers coming in at that level, especially since the Greek deal seems to be moving in a positive direction." Also adding to the risk appetite are statements from Trichet that in the longer term, he could suggest forming a finance ministry of the European Union, adding there is no crisis in the EUR. Lastly, he added that if aid programs fail, as a second stage he could consider deeper integration of economic policy, more central command of domestic policies. Of course they will: once all is plundered, the ECB will become the defacto "protector" of its colonies. And falling solidly into the trap is Greece where according to a government source the privatization plans may run faster than expected.

Altogether, as the chart below suggests the market has roundly decided to stick its head in the sand today.

 

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Thu, 06/02/2011 - 07:16 | 1331715 GeneMarchbanks
GeneMarchbanks's picture

Greek Default in three... two...

http://tradewithdave.com/?p=6669

Rumor but awaiting confirmation...

 

Thu, 06/02/2011 - 07:18 | 1331717 BigDuke6
BigDuke6's picture

ECB QE in 3...2...

Thu, 06/02/2011 - 08:49 | 1331878 The Rock
The Rock's picture

EU Finance Ministry? "Second stage" towards NWO.

Thu, 06/02/2011 - 09:14 | 1331946 The Rock
The Rock's picture

TD, this PU Finance Ministry thing needs to be exposed in a separate posting front and center.

Thu, 06/02/2011 - 07:20 | 1331716 tip e. canoe
tip e. canoe's picture

the Left Hand buys from the Right Hand which gives back to the Left Hand...everyone else gets the middle finger.

Thu, 06/02/2011 - 07:28 | 1331726 Josephine29
Josephine29's picture

The squeeze is being put on the youth of Greece.

Employers will be able to offer young people monthly salaries of less than 600 euros as part of labor market reforms that the government has agreed with the European Union and the International Monetary Fund………One of these is to allow employers to pay anyone under the age of 25 20 percent below the monthly minimum wage (739.60 euros gross), as set by the national collective contract. This means that those affected will be paid a gross monthly salary of 591.60 euros.

 

http://t.co/JZOdwrI

 

Isn't it about time the bankers were put on a wage of 600 Euros per month?

Thu, 06/02/2011 - 08:52 | 1331885 The Rock
The Rock's picture

I like it! But the massa ain't gonna have none of dat.

Thu, 06/02/2011 - 07:39 | 1331737 scratch_and_sniff
scratch_and_sniff's picture

The bond vigilantes obviously liked the way spain dealt with its plebes. By the way, the folks at 4cast are a bunch of twats, here's a few other things they said this morning;

"Expect any moves in eur/usd to be contained"

"our dealers tell us that the offers at 1.4450 will be hard to shift"

"more risk aversion, given worsening Greece crisis. EUR/USD eye break of 1.4250,"

"likely top in at 1.4459"

"ECB likely to pause on 9 Jun."

"Eastern European EUR/USD sales keep the topside limited"

"Market is unlikely to commit itself to breakout moves ahead of payrolls data out on Friday"(like they wouldnt be pricing a disaster in or anything?)

" it is worth noting that currently markets are focused more on debt troubles than carry interest. Any move up can be prone to a sudden spike down.

" we expect spec selling to really pick up again, and judging by dealer comments, it will take some momentum to take these 1.4450 offers out." (sure thing)

This shit goes on and on and on...

And what about after they had their ass handed to them?  "it looks like no news is good news". LOL, would that be the same "no news" that inspires you to f***ing make it up as you go along!! Whats the saying - If you have nothing good to say...

Thu, 06/02/2011 - 07:44 | 1331739 HpDeskjet
HpDeskjet's picture

The EU (Olli Rehn) wants to voluntarily force (???) Greek bondholders to roll over their existing positions ... Polticians are both clueless and desperate, the PIIGS-debt bomb will explode this year, time's up.

Thu, 06/02/2011 - 07:44 | 1331742 PaperBear
PaperBear's picture

Does the sale of real assets owned by the Greek state for only 20% fair value sound like financial terrorism to you ?
Since Greece used CDS arranged by Goldman Sachs to hide some of their liabilities when they entered into the euro currency, I wonder if Goldman Sachs will be a party in the proposed sale as their reward.
Apparently, this is how the IMF and WB have operated throughout the third world but we in the rest of the world were mostly blind to it.
Will it be too late to do anything about the situation once all of the nations around the world have sold all of the people's public property and private property ?
Will we be left with nothing not even the shirts on our backs ?
Those who think this could never happen can go back to the fantasy world.

Thu, 06/02/2011 - 08:56 | 1331895 The Rock
The Rock's picture

Welcome to NWO.

Thu, 06/02/2011 - 07:49 | 1331744 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Hi Mr. Hu, Timmy here. Let's buy some Spanish bonds today, shall we? Splendid. Good investment. Yes, yes, they will be backed by the full faith of the ECB, wink wink. The Parthenon? Yes, of course you can take all of those clay soldiers and line them up inside, fabulous, the tourists will love it. Disney has nothing on you Mr. Hu. The Greeks? Oh the Greeks will never have seen so many Chinese tourists, the Greeks will be fine. You guys like goat cheese and yoghurt right? Oh the ports? Of course, no worries. Everything in due time. For now, it's time to hit the "send" button on your screen. Great, many thanks. Say hello to the wife and kids, yes we'll talk tomorrow, buh-bye!

Thu, 06/02/2011 - 07:58 | 1331757 Ferg .
Ferg .'s picture

As an EU citizen I sincerely hope that a pan-European finance ministry never , ever , comes into existence . Individual sovereignty has been bleeding here for decades . The original reason for the establishment of the EU was to promote peace after several devastating and destructive wars . The progenitor of the EU , the ECSC ,  intertwined the economies of the two nations at the heart of these conflicts , France and Germany , to ensure that an act of war would also be an act of self flagellation . This founding goal has long been achieved .

 The concession of political , monetary and legal authority to central institutions is , in my opinion , occuring far too quickly . From a cultural , linguistic , sociological and educational perspective this level of integration is completely unwarranted . And of course it surely goes without saying that monetary union , without a concurrent fiscal union , is asinine at best . 

Thu, 06/02/2011 - 08:07 | 1331773 scratch_and_sniff
scratch_and_sniff's picture

Thats the way its going Ferg, one chess move at a time. I remember several years back that any EU directives were only ordering people to have straighter bananas and point children’s swings so they weren’t facing the sun, and all the other pointless policies that everyone was wrongly laughing at. Oh how times have changed, the boiling frog springs to mind.

Thu, 06/02/2011 - 08:47 | 1331851 Ferg .
Ferg .'s picture

Yeah one step at a time . Every few years a new treaty cedes more authority in several areas . I admit I used to laugh at , or at least I found some amusement , in all those obscure EU directives . The more I delved into things though the less I found myself laughing . 

Thu, 06/02/2011 - 09:08 | 1331929 The Rock
The Rock's picture

"the boiling frog"

Aaron Russo's "Mad As Hell" comes to mind.

Thu, 06/02/2011 - 08:24 | 1331805 GeneMarchbanks
GeneMarchbanks's picture

Ferg, sharing a currency trumps all other aspects of modern life. Centralization has been a theme in the modern west for some time. It seems to you to be moving "too quickly" means that there simply is no opposition.

Thu, 06/02/2011 - 08:59 | 1331912 Ferg .
Ferg .'s picture

It's not that I'm against the concept of centralization , and you're right , it certainly has been a theme of the modern west for decades , even centuries . I just think that the degree and speed of centralization in Europe is inappropriate . I don't think it's a matter of there being no opposition , in fact the rejection of the EU Constitution in France and Holland and the initial rejection of the Lisbon Treaty in Ireland , all expressed through referendums , the purest form of democracy there is , proves that there is significant opposition to further integration . And although I do respect every EU nations' method of treaty ratification , it's probably fair to say that if referendums were held across each and every EU member state for each and every treaty , then the current level of integration would not exist .

Thu, 06/02/2011 - 09:31 | 1332004 GeneMarchbanks
GeneMarchbanks's picture

And so... your points are well taken. You are in the EU and looking from within. I'm in a country trying to get in(nevermind which one) and my concern is more about the expansion of the monetary EU, which in my opinion is an extension of the transnational banking cartel. Make no mistake, it has no plan B, only expansion at all costs. This a cancer and it needs removal sooner rather than later.

Thu, 06/02/2011 - 11:19 | 1332355 tired1
tired1's picture

>sharing a currency trumps all other aspects of modern life

 

Hmm... PM's come to mind. I inderstand it's a method that's been tried before with some success.

Thu, 06/02/2011 - 11:09 | 1332334 tired1
tired1's picture

The Great Irony here is that for continued peace the European States joined into a monetary merger with the folks that financed the misery brought about there; now the semi-soveriegn states are simply fish farms to be harvested at will.

Thu, 06/02/2011 - 11:22 | 1332384 tired1
tired1's picture

>France and Germany , to ensure that an act of war would also be an act of self flagellation

Historically, such alliances were solidified trough marriage. Sarkozy + Merkel? I guess I can picture it.

Thu, 06/02/2011 - 08:00 | 1331769 Cdad
Cdad's picture

Today's disastrous headline out of Europe should come from Ireland.  They are in court today to determine the legality of haircuts for bondholders. Of course, no one is talking about it over at the BlowHorn [CNBC] which should be warning enough for everyone.  No one can see this coming, by the way.

http://www.reuters.com/article/2011/06/01/ireland-bonds-idUSLDE74U27A20110601

"In this climate the court is unlikely to intervene on the side of the bondholders."

Thu, 06/02/2011 - 08:48 | 1331863 Ferg .
Ferg .'s picture

Keeping a very clsoe eye on this myself . Some of those haircuts are particularly vicious . More akin to a complete head shave . 

Thu, 06/02/2011 - 09:39 | 1331987 michigan independant
michigan independant's picture

"You'll see plenty of buyers coming in at that level"

Tribute boots on the ground to collect it for there own good.

http://www.youtube.com/watch?v=PQ8Qi86i82s&feature=related

Run you fools...

Thu, 06/02/2011 - 11:43 | 1332472 jmc8888
jmc8888's picture

"if aid programs fail, as a second stage he could consider deeper integration of economic policy, more central command of domestic policies"

Imperial takeover of a country.  I guess that's not oppression according to those in our main stream media, gov't, etc.

ECB is like any other of history's aggressors, and sadly we're on their side!

All because of their fraudulent debt, that they keep foisting upon a different country's serfs.

Those demonstrations/riots will become mobs.

I wonder what sort of NATO action to 'stabalize the peace', will be authorized eventually.

Raise your right hand and repeat after them (ECB)...Seig.....

Remember, if you are against imperialism, you too are a terrorist. (see how they set that up so nicely for themselves...bend over and take it...or you're a terrorist).  Get ready average greece pension demonstrator, you're the new Al-Qeada....hope you got the memo.  We're all scared of you so much, we're raising our defense expenditures to well over a trillion.

Without a doubt Greece should default on 100 percent of it's loans. Otherwise, it's 3rd world for Greece...and for every country after that. (all of them)

Glass-Steagall (as all of this is called fraud and illegal in a sane world)

 

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