Because they had had neither the facts nor the law on their side, lawyers for Wall Street trade groups made up stuff in their complaint to overturn new regulations on speculative position limits.
Gold and the dollar are Bank of America Merrill Lynch’s top currency trades for 2012. The second-biggest U.S. bank by assets after JPMorgan Chase & Co. said that investors should buy gold versus the euro as the ECB engages in quantitative easing to contain debt turmoil. David Woo, global head of rates and currencies in New York at the Bank of America Corp. unit, told clients in research note that “the ECB will be buying more government debt and doing QE, so buy gold against the euro.” “The second major theme is U.S. fiscal tightening is about to come and the U.S. economy will slow, and this will be very good for the U.S. dollar.” “The general theme for the year ahead is pretty negative for the risk environment,” Woo said.
- Lower than expected manufacturing PMI data from China prompted concerns surrounding sustainability of the Chinese growth, and raised hopes for further monetary easing measures by the PBOC soon
- Successful bond auctions from Spain and France resulted in significant tightening of the Spanish/German and French/German 10-year government bond yield spreads with heavy buying from domestic accounts
- Market talk of the ECB buying in Italian and Spanish government debt via SMP
- Gilt futures dropped more than 50 ticks following a lackluster Gilt auction from the UK’s DMO
- Focus remains on the debt and political turmoil surrounding Spain and Italy, with particular widening observed in the Spanish/German 10-year government bond yield spread. There was market talk of the ECB buying the Spanish and Italian government debt
- Spain had a lackluster bond auction, with the auction yield printing an Euro-era high
- Fitch said that the Euro-zone contagion poses a threat to the US bank rating outlook. Eurodollar and Euribor futures have remained under pressure throughout the European session
- Italian PM Monti said will fully implement the previous government's letter of intent to the EU, and will consider necessity of additional measures
- GBP/USD gained around 30 pips following higher than expected retail sales data from the UK
This is a fantastic opportunity to observe the workings of an actual criminal conspiracy to defraud the American people in action.
- Market talk that the ECB is buying Eurozone government bonds, while some traders suggested that the ECB bought over EUR 2bln worth of government debt
- Bunds came under pressure following a technically uncovered Schatz auction from Germany
- UniCredit shares came under pressure after news emerged that co.'s CEO is meeting with the ECB, to ask for more access to ECB funding for Italian banks by widening type of collateral used
- GBP came under selling pressure following higher than expected ILO unemployment rate from the UK, and after the BoE slashed its growth and inflation forecasts for the UK
- German Chancellor said that she believes treaty changes are needed to win back market confidence, and Germany therefore is willing to give up some national sovereignty
For what it's worth, Goldman likes gold. "Consumers: We expect gold prices to continue to climb in 2011 given the current low level of US real interest rates. Further, with our US economics team now forecasting slower US economic growth in 2011 and 2012, we expect US real interest rates to remain lower for longer, supporting higher gold prices through 2012. Consequently, we recommend near-dated consumer hedges in gold through 2012. Producers: With gold prices expected to continue to climb through 2012, we find hedging opportunities less attractive for gold producers at this time." In other news, Goldman also likes Silver, Copper, Zinc, WTI and Brent. In other words: QE3 is coming.
"Every Former MF Global Account Faces A Margin Call" - Non-CME MF Global Transfers Get The Monday BluesSubmitted by Tyler Durden on 11/07/2011 00:15 -0500
If you are a former MF Global account and you have your account transferred over to RJ O'Brien, or many others, you will have no choice but to fork out a bunch of cash to keep positions on, according to a statement awaiting all such accounts on the RJO website, or else be next in line for broad liquidations. To wit: "Former MF Global customers transferred to R.J. O’Brien were delivered with approximately 75% of the maintenance margin requirement related to their accounts. As a result, every former MF Global account faces a margin call. No excess equity was transferred." Naturally the next question is "Why are we not getting 100% of our MMR (Maintenance Margin) from the exchange?" And the answer: "This is an agreement between the trustee and CME Group. Please visit www.mfglobaltrustee.com for further information or questions." So, in addition to lowering initial margin for everyone, not just MF Global clients, did the CME iron out preferential terms over other exchanges and get larger equity of the account transfer than most? Because somehow we doubt that RJ O'Brien is the only exchange that is greeting their clients with this particular notice.
- There were conflicting reports that Greek PM Papandreou has resigned. It was also reported that the EU referendum is off the table
- Also, according to party sources, Greek socialist MPs are forging proposal for coalition government headed by former ECB vice-president Papademos
- EU Commission said that the only option is for Greece to stay in the Euro as treaties don’t foresee an exit from the Eurozone. It also said that the Greek tranche payment is conditional on austerity implementation
- Market talk that Qatar is willing to invest into the EFSF, however earlier the Chinese President said that the Eurozone problem should mainly be solved by Europe
- According to a senior G20 official, the G20 is assessing the cost of a Greek default
- German Chancellor Merkel said that all models that involve the ECB are not on the agenda tonight, however both leverage models are going to be discussed
- According to a senior EU source, IMF thinks 60% Greek debt write-down is not enough, and it should be 65% or more
- Widening was observed in the Greek/German 10-year government bond yield spread ahead of the EU leaders' summit today
- According to a draft statement from the EU heads of state, banks would need guarantees on liabilities for more direct support for access to funding. It further said that there is broad agreement on requiring banks to have capital ratio of 9%, to be attained by June 30th 2010
- There were reports that the Italian PM Berlusconi may resign
U.S. Diesel could see significant price spikes before year-end while gasoline demand is at 10-year low.
- ECB said to debate new 12-month loans at the October 6th policy meeting where they may discuss a rate cut
- EU may speed up ESM enactment to stem the crisis with Euro aides discussing setting up the fund in 2012 a year early.
- German IFO data higher than expected on all three readings
- CME raises margin requirements for longest dated T-Bond futures by 20%