Puh… Why don’t we just wait for Apple? They might pitch a maxi iPhone 6? Or so…
Otherwise, rather Bad Karma day.
Flat start, bullish morning, refreshing afternoon. Nothing concrete or fundamental, so it’s a spiritual thing.
Might have missed something today .
The weakness after the US close and soft sentiment figures understood.
The mid-morning change in mind and subsequent rebound seems a bit puzzling here.
PMIs rather bad, the rest not good enough…
Uuuhh. Yesterday a heart attack and today Lights Out? Then again, markets went up seamlessly with no trigger and can thus slide the same way.
AAPL will need to come up with a helluva surprise mini iPad that does the cooking and bring the kids to school to turn around things overnight.
Spain situation still by far not settled enough to last without some real interventions / decisions.
European equity resilience seems surprising, given the otherwise gloomier mood. No news still played out as being good news and even catch-up to US levels seems a doubtful explanation.
This week was more spaced out with pessimism followed by Spain and equities ripping higher on no news, at least nothing major nor new.
So we’ll dedicate the week to the Fab Fours’ song, which title’s abbreviation has always been linked to substance abuse.
Just be careful when coming down…
Here is the issue of legacy liabilities. Here Germany has been fairly clear. The new ESM fund will not pick up the check and it is up to each country to pay for their own past problems. You may translate this piece of jargon into a “No” to Ireland that the ESM will not pick up the bill for the Irish banks and the same response for Spain. This new German definition puts Portugal, Greece, Spain and Ireland back at square one and effectively closes the door on any further negotiations. While all of this wrangling continues the tone at the summit was no longer the nicey-nice repartee of past meetings. Cyprus needs money, Spain needs money, Portugal probably needs more money and Greece is just about out of money. The summit was held, the meeting is over and the worth of any accomplishments is about at Zero as the only agreement was a plan to have a plan to deal with bank supervision. This is not an inch forward, this is not a millimeter forward; this is quicksand where they are all stuck as both money and time run out as the Socialists scream for alms while the landed gentry, utilizing head fakes and other polite deceptions, refuse to provide it. The clock is running, the cash is almost gone and make-believe will no longer suffice. The crisis phase, in my opinion, has been entered.
Spacy week, though… Song pick of yesterday’s said it all. Somehow, things have spun out of control and the rocket started stalling and then drifting into the void…
Poor Major Tom left the capsule too early.
Regional elections in Spain over the weekend. As Rajoy denies there’s any pressure to seek help, BONOs slide. Damned if you don’t; damned if you do…
Interesting to see Core EGBs’ only muted reaction to the fading Risk sentiment, though (Bunds and UST still +15 on the week).
First “decent” Spanish auction in ages, decent being just normal, if not even boring. In absence of hard facts, outside the hypnosis trick “All will be well! Believe me…", I’d like to remain on the cautious side, though.
On EU decisisons, it could look like Good Cop / Bad Cop act, if it wasn’t clear that the players actually mean what they are saying.
Won't be EZ...
The world is running down a quite slippery slope in its attempt to avoid calamity. The political machines in Europe and the United States and to a real but lesser extent in China have passed the hat to their central banks because either they cannot or will not face up to the severity of their problems. This “faith based initiative” is misplaced, as liquidity and faith are driving the boat and derelict accounting is providing the fuel. The United States, having moved far past the “safety net” that has always been in place, are faced with a very real choice between Socialism and Capitalism. In Europe the problems are also of a fundamental nature as the definition of “More Europe” in Germany is decidedly different than the definition in Spain. But the fantastical belief that the Central Bank will wave it magic wand and make everything all good again is the stuff of Mommy kissing the boo-boo and everything will be just fine.
European Risk remains buoyant (unlike in the US), but the question is whether Moody’s upholding Spain a tick above Junk is really worth a 30bp plus relief rally?
Hmmm… Bunds getting trashed by equities and Spailout; Spain getting a lift on the latter, but a break from Greek Troika news and German back pedalling.
Spain better, but had lost 20 bp just yesterday.
Equities stopping out and squeezing. Credit ripping tighter.
Risk On, but not everywhere. Wild...
European equities trying to decouple from EGBs and US equities, trying to trade “No news is good news”.
Low action day.
Short term trading strategy buy Spain on weekend bail-out hopes and resell rapidly might need to be deepened. Not much to chew on eventually.
Particularly light on hard data, take away from this week’s action was reduced volatility in the EGB world (unlike rather more jumpy and eventually depressed equities).
After rainy weeks, better weeks, we pretty much had a rather sleepy week.
Stronger Periphery trapping European equities, with the latter dragged down by US apathy.
Risk adverseness factors (equities – Periphery - EUR) decoupling.
US equities seem utterly tired.
Somehow the last months’ rally ahead of QE has tired everyone and since delivery every step seems sooooo heavy.
Stronger Periphery close will be the usual opportunity for politicians to rant about the lack of clout of rating agencies.
Good Jump in Risk appetite. Question is how far. Lack of absence of negative news, or better, markets simply ignoring the latter, doesn’t make for a convincing bullish rebound.
I’d say: We won’t get fooled again! European Bull trap.