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Overnight Futures Levitation Mode Engaged But Subdued

Tyler Durden's picture




 

For all the talk of how stellar this earnings season has been so far (mostly for the financials if only relative to crushed expectations, and all in non-GAAP terms of course), some of the biggest bellwethers had nothing to write home about yesterday with Coca-cola (-2.85%), Travelers (-3.8%) and McDonalds (-1.3%) all falling after reporting mixed Q2 results with the latter saying that there was some “some trepidation” amongst franchisees about boosting staffing amid rising labor costs related to state minimum-wage increases and health care expenses. Adding to that, Apple, the largest company by market cap, fell 0.6% in afterhours trading after reporting Q2 EPS of $1.28 (vs 1.23 consensus), but missing top line estimates ($37.4bn vs $37.9 expected).

And if despite yesterday's lackluster earnings the most recent market levitation on low volume was largely due to what some considered a moderation in geopolitical tensions after Europe once again showed it is completely incapable of stopping Putin from dominating Europe with his energy trump card, and is so conflicted it is even unable to impose sanctions (despite the US prodding first France with BNP and now Germany with the latest DB revelations to get their act together), as well as it being, well, Tuesday, today's moderate run-up in equity futures can likely be best attributed to momentum algos, which are also rushing to recalibrate and follow the overnight surge in the AUDJPY while ignoring any drifting USDJPY signals.

Overnight markets have shaken off the mixed US earnings tape to trade higher across credit, FX and equities. The major mover during the Asian timezone is the AUD, which is about 0.4% firmer against the greenback following the Australian CPI print which rose to +3.0% YoY. The front end of the Australian bond curve has sold off by around 4-5bp. In EM Asia, Indonesia has seen a 1% richening in the IDR and 5-yr sovereign CDS has tightened 6bp following official news that the market-friendly Jokowi has indeed won the presidential election. However there has been profit-taking in Indonesian assets as we go to print, with headlines that the runner-up, Prabowo is planning to contest the vote in the Constitutional Court (Bloomberg).

Elswhere in Asia, global markets continue to watch the developments in the Chinese property market and today there were further signs that some Chinese cities are loosening home purchase restrictions to boost sales. Chinese construction material stocks are up 1.1% today and this is news has boosted the Shanghai Composite to a six-week high. We’ve also got one eye on what could be the second ever default in the Chinese onshore bond market by a company called Huatong Road & Bridge. The company failed to meet a principal repayment yesterday, but there are reports today that the local government may step in to help ensure the company meets bondholder obligations. How the Chinese authorities react to this case will be interesting.Asian stocks mostly rise with Hang Seng outperforming and Nikkei underperforming; MSCI Asia Pacific up 0.4% to 148.5; Nikkei 225 down 0.1%, Hang Seng up 0.8%, Kospi little changed, Shanghai Composite up 0.1%, ASX up 0.6%, Sensex up 0.4%; 8 out of 10 sectors rise with energy, materials outperforming and information technology, telecom services underperforming.

Heading into the North American open, stocks in Europe are seen broadly higher, with the German DAX outperforming following earnings by Daimler (+1.41%) pre-market. At the same time, Deutsche Bank (-0.98%) shares remained under pressure and headed for their largest fall in a month as market participants reacted to reports by the WSJ which indicated that bank overseers faulted some of the firm’s businesses in the US last year for “inaccurate and unreliable” financial reports. 17 out of 19 Stoxx 600 sectors rise; autos, basic resources outperform; utilities, banking underperform; 63.3% of Stoxx 600 members gain, 31.5% decline; Eurostoxx 50 +0.2%, FTSE 100 +0.1%, CAC 40 +0.2%, DAX +0.4%, IBEX -0.1%, FTSEMIB -0.5%, SMI +0%

Events in Ukraine have somewhat pushed Portugal’s banking troubles out of the headlines over the past few days even as the situation has continued to evolve. Banco’s parent ESI asked for protection from creditors at the end of last week and over the weekend BES promised to reimburse at maturity all the CP’s issued by its various parent holdco’s - a commitment worth around €820mn. Adding in Banco’s other exposures to the rest of the Espirito Santo Group it seems likely that BES at some point will have to raise further capital. On this note the Governor of the Bank of Portugal, Carlos Costa, was quoted on Friday in remarks to Parliament that, “preliminary contacts between BES and international investment banks, as well as interest shown by several entities, [namely] investment funds and European banks, show that a private solution to reinforce capital is possible" (Bloomberg). Yesterday it came out that Banco has postponed its Q2 earnings report, due on July 25th. In related news there were headlines after the market close last night that Compagnie Bancaire Helvetique had acquired a majority stake in Espirito Santo Private Bank although no further details beyond this announcement were given.

Looking at the day ahead, the corporate reporting season rolls on with Daimler, Iberdrola, Boeing, Dow Chemical, Simon Property reporting today. Facebook reports after the US market close. The Bank of England publishes its July meeting minutes this morning. Finally, today the SEC meets to vote on rules imposing redemption gates on money market funds: expect the money market gates we first discussed in 2010 to be finally imposed.

Market Wrap

  • S&P 500 futures up 0.1% to 1976.3
  • Stoxx 600 up 0.2% to 343.2
  • US 10Yr yield up 1bps to 2.47%
  • German 10Yr yield up 0bps to 1.17%
  • MSCI Asia Pacific up 0.4% to 148.5
  • Gold spot up 0% to $1306.9/oz

Bulletin Headline Summary from Bloomberg and RanSquawk 

  • Treasury curve spreads steepen led by modest weakness in long end as global stocks gain amid strong corporate earnings; Daimler AG, Apple Inc. among companies beating estimates.
  • China avoided a second default in its onshore corporate bond market as Huatong Road & Bridge Group Co. paid all principal and interest on 400 million yuan ($65 million) of notes today, four people familiar with the matter said
  • The Bundesbank is resisting a weaker euro and opposing the most aggressive strategies Mario Draghi could deploy to ignite growth in Europe, says Simon Derrick, chief market strategist at Bank of New York Mellon Corp
  • The Bank of England said some members of its Monetary Policy Committee have started to argue that the risk of a rate increase undermining the recovery has diminished as growth becomes more entrenched
  • Deutsche Bank AG dropped in Frankfurt trading after the NY Fed was said to have faulted the regulatory reports of some of the firm’s U.S. businesses last year
  • Obamacare and the cost of health coverage for millions of Americans were cast into doubt after two federal appeals courts issued opposite verdicts on whether the government can subsidize policies through federally run insurance exchanges
  • Chinese banks will probably offer discounted mortgage rates to their clients in the second half of 2014 as demand in the country’s housing market weakens, according to a Bloomberg News survey
  • Diplomatic pressure to halt more than two weeks of fighting between Israel and Hamas mounted; complicating efforts is the hostility between the new government of Egypt, a traditional mediator of Gaza truce deals, and Hamas
  • The first plane carrying bodies from flight MH17 left eastern Ukraine for the Netherlands for identification, as questions arose over whether all victims’ remains had been recovered from rebel-held territory
  • Sovereign yields mostly lower. Euro Stoxx Banks +1.1%. Asian mostly higher. European equities, U.S. stock futures gain. WTI crude steady, copper and gold gain

US Event Calendar

  • 7:00am: MBA Mortgage Applications, July 18 (prior -3.6%) Central Banks
  • 7:45am: Bank of England’s Carney speaks in Glasgow
  • 5:00pm: Reserve Bank of New Zealand seen raising official cash rate to 3.5% from 3.25%
  • 11:00am: Fed to purchase $2.5b-$3.25b notes in 2021-2024 sector

FIXED INCOME

Despite the alleviation of tensions between the West and Russia which resulted in the MICEX snapping a six day losing streak, Bunds traded higher, largely mimicking the upside surge by Gilts after the minutes from the most recent MPC meeting revealed a unanimous vote to keep rates unchanged. At the same time, the MPC remained reluctant towards committing to rate hikes and pointed to the need to re-assess spare capacity after the QIR release in August. As a result, Short-Sterling curve bull flattened, while the UK/GE 10y spread narrowed to its tightest level since July 14th.

Barclays Prelim Pan Euro Agg Month-end Extension +0.11y (Prev. month 0.09y, 12m avg. 0.08y), Prelim Treasury Month-end Extension +0.08y (Prev. month 0.08y, 12m avg. 0.09y)

EQUITIES

Heading into the North American open, stocks in Europe are seen broadly higher, with the German DAX outperforming following earnings by Daimler (+1.41%) pre-market. At the same time, Deutsche Bank (-0.98%) shares remained under pressure and headed for their largest fall in a month as market participants reacted to reports by the WSJ which indicated that bank overseers faulted some of the firm’s businesses in the US last year for “inaccurate and unreliable” financial reports.

As a reminder, after the closing bell yesterday Apple reported Q3 EPS USD 1.28 vs. Exp. USD 1.23 and Q3 Gross margin 39.4% vs. Exp. 37.8%, while Microsoft Corp reported Q4 EPS USD 0.55 vs. Exp. USD 0.60; adding that Nokia accounted for 0.08/shr loss in Q4.

FX

The release of somewhat dovish MPC minutes resulted in GBP reversing some of the outperformance vs. EUR, which saw EUR/GBP come off multi-month lows, while also lifting EUR/USD off its 8-month low printed earlier in the session and back into positive territory. Elsewhere, AUD/USD rose to a 2-week high after trimmed mean inflation reading, the RBAs preferred measure, rose to 2.9% vs. Exp. 2.7%, close to the upper bound of the central bank’s 2-3% target band, which prompted fears that the central bank may subvert its neutral tone.

COMMODITIES

In terms precious metals, the price action was range-bound by both gold and silver, with gold remaining above the key USD 1,300 level as geo-political related premium (Israel/Gaza and Russia/Ukraine) continued to offset growing expectations for a Fed rate hike. Elsewhere, both WTI and Brent crude futures are seen little changed ahead of DoE inventories data later on in the session

* * *

DB's Jim Reid concludes the overnight market recap

Markets are struggling for direction at the moment with geopolitical concerns halting what was a strong run to the end of Q2 and start of Q3. Indeed, in recent weeks the S&P 500’s 13%+ rally from the February lows has stalled at just below the optically-important 2,000 level. Yesterday’s +0.50% gain in the index notched up seven consecutive days where the S&P500 has moved in the opposite direction to the session before. This is the longest streak since late February and one of the longest since the financial crisis.

While geopolitical risks may be to blame for the recent risk-on/risk-off episodes, it was interesting to see corporate earnings turn from a supportive factor to a drag on markets yesterday. Indeed, Coca-cola (-2.85%), McDonalds (-1.3%) and Travelers (-3.8%) all fell after reporting mixed Q2 results. For what it’s worth, McDonald’s CEO said yesterday that there some “some trepidation” amongst franchisees about boosting staffing amid rising labor costs related to state minimum-wage increases and health care expenses (WSJ). Adding to that, Apple, the largest company by market cap, fell slightly in late-hours trading after reporting Q2 EPS of $1.28 (vs 1.23 consensus), but missing top line estimates ($37.4bn vs $37.9 expected). The tech giant also said that the current quarter’s revenue will be US$37-40bn, below consensus of $40.5bn, which may have added to the mixed investor reaction.

The better sentiment over the last 24 hours was in part driven by the outcome of the EU foreign ministers meeting where leaders agreed to expand a list of Russian entities subject to asset freezes and travel bans but did not take the extra step of introducing phase three sanctions. Europe is always going to struggle to reach an aggressive agreement on sanctions given the different countries level of trade/activity with Russia. This is an evolving story though, and the ministers agreed to prepare by Thursday a list of possible options including potential sanctions targeting the energy and financial sectors (Washington Post) and restrictions on Russian companies accessing parts of the EU capital markets. However such measures would be imposed later only if Russia does not force pro-Moscow separatists to grant unfettered access to the crash site and fulfil its pledge to co-operate with an international investigation. The Ruble squeezed 0.7% and Russian CDS tightened 12bp on the day.

Overnight markets have shaken off the mixed US earnings tape to trade higher across credit, FX and equities. The major mover during the Asian timezone is the AUD, which is about 0.4% firmer against the greenback following the Australian CPI print which rose to +3.0% YoY. The front end of the Australian bond curve has sold off by around 4-5bp. In EM Asia, Indonesia has seen a 1% richening in the IDR and 5-yr sovereign CDS has tightened 6bp following official news that the market-friendly Jokowi has indeed won the presidential election. However there has been profit-taking in Indonesian assets as we go to print, with headlines that the runner-up, Prabowo is planning to contest the vote in the Constitutional Court (Bloomberg). Elswhere in Asia, global markets continue to watch the developments in the Chinese property market and today there were further signs that some Chinese cities are loosening home purchase restrictions to boost sales. Chinese construction material stocks are up 1.1% today and this is news has boosted the Shanghai Composite to a six-week high. We’ve also got one eye on what could be the second ever default in the Chinese onshore bond market by a company called Huatong Road & Bridge. The company failed to meet a principal repayment yesterday, but there are reports today that the local government may step in to help ensure the company meets bondholder obligations. How the Chinese authorities react to this case will be interesting.

Yesterday’s data docket was pretty supportive for risk, most notably the benign US CPI reading. Going into the day, there was some concern that we could see a high CPI print, and indeed 10yr USTs sold off by around 3bp leading into the data. For the record, US core inflation's YoY growth rate slipped back to 1.9% from 2.0% previously. Headline inflation rose 0.3% (in line with consensus), as food/beverages was unchanged and energy rose 1.6% in the month—mainly due to seasonal factors related to gasoline prices. The release of the data saw yields rally 4bp, to close 1bp lower of the day at 2.46%. The manufacturing and housing data was also fairly positive from a markets point of view. US existing home sales rose 2.6% in June (1.9% expected) to an annualized rate of 5.04m units. The Richmond Fed manufacturing index rose to 7 (vs 3 in the prior month and 5 expected).

Events in Ukraine have somewhat pushed Portugal’s banking troubles out of the headlines over the past few days even as the situation has continued to evolve. Banco’s parent ESI asked for protection from creditors at the end of last week and over the weekend BES promised to reimburse at maturity all the CP’s issued by its various parent holdco’s - a commitment worth around €820mn. Adding in Banco’s other exposures to the rest of the Espirito Santo Group it seems likely that BES at some point will have to raise further capital. On this note the Governor of the Bank of Portugal, Carlos Costa, was quoted on Friday in remarks to Parliament that, “preliminary contacts between BES and international investment banks, as well as interest shown by several entities, [namely] investment funds and European banks, show that a private solution to reinforce capital is possible" (Bloomberg). Yesterday it came out that Banco has postponed its Q2 earnings report, due on July 25th. In related news there were headlines after the market close last night that Compagnie Bancaire Helvetique had acquired a majority stake in Espirito Santo Private Bank although no further details beyond this announcement were given.

Elsewhere in the periphery banking sector, Cyprus’ largest bank (Bank of Cyprus) is potentially returning to capital markets with a senior unsecured bond. According to the FT, there is investor demand for products that leverage the expected Cypriot recovery and there has been a steady OTC trade in deposits that were turned into Bank of Cyprus equity last year. Non-performing loans of EUR12.8bn make up almost half its balance sheet and have been shifted into an internal “bad bank” to be run down, sold or restructured, per the article. The Financial Times also reports that there has been growing US demand for total return swaps linked to Markit bond and loan indices. According to the article, there is sufficiently broad demand that a major US bank is looking to issue EUR10bn of the instruments in one deal – the funds are being deployed to offer leveraged returns at a time when credit spreads are low and volatility is low. This is perhaps an offset to the recent news of outflows in US HY.

Looking at the day ahead, the corporate reporting season rolls on with Daimler, Iberdrola, Boeing, Dow Chemical, Simon Property reporting today. Facebook reports after the US market close. The Bank of England publishes its July meeting minutes this morning. The US SEC meets to vote on rules imposing redemption gates on money market funds.

 

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Wed, 07/23/2014 - 07:13 | 4992034 Hindenburg...Oh Man
Hindenburg...Oh Man's picture

"today's moderate run-up in equity futures can likely be best attributed to momentum algos, which are also rushing to recalibrate and follow the overnight surge in the AUDJPY while ignoring any drifting USDJPY signals."

Also, the BTFD algos have been switched over to the BTFATH algos for the day. 

Wed, 07/23/2014 - 07:23 | 4992049 ilion
ilion's picture

British pound is under pressure today following the release of the Bank of England minutes today. Video of the news announcement and the effect it had on FX markets: https://www.youtube.com/watch?v=WEJo9dA3_0o

Wed, 07/23/2014 - 07:25 | 4992054 GetZeeGold
GetZeeGold's picture

 

 

Switching control over to Skynet.....what's the worst that could happen?

Wed, 07/23/2014 - 07:30 | 4992060 Headbanger
Headbanger's picture

The U.S. equities market is looking very tired out struggling along at these obscenely over priced heights.

Once the stampede for the exits begins then it's too late.

 

And I think it's moar like R2D2 in control of the markets

Wed, 07/23/2014 - 07:15 | 4992035 jubber
jubber's picture

So Deutsche news ignored DAX rises 100 points, Espirito news ignored up 7%, Hang Seng through 24000 highest in six years, India new ATH, all European INdexes up even after Potuguese president spoke on systemic contagion, and today massive POMO... S&P 2000 the target today or by Friday looks as though it has been programmed in to the Fed's computer .

And with these new ATH's the 10y US 2.46% and 30 3.25%  LOL

Wed, 07/23/2014 - 07:24 | 4992052 rsnoble
rsnoble's picture

2000 is a magnet.  Or better yet a black hole.  Count on it.

Our shit doesn't stink!!

How are the fucking clowns going to press forward with all their bullshit plans with everything crashing down around them?  A huge fucking manipulated facade to keep the criminals on their solid gold perches is all this bullshit amounts to.

Wed, 07/23/2014 - 07:36 | 4992075 Bill of Rights
Bill of Rights's picture

Yup, look at Whirlpool they missed and missed big, and cut guidance and in the same breath said they were bullish lol...it hilarious to watch.

 

The only way to starve the beast is to not feed it. My wife and I have cut way back on spending in fact we buy only what we need when we need it, other than that I'm fine with sitting home, prior to that every time one leaves the dam house its a $100, which as we all know is the new $10. We are just tired of the consumerism.

Wed, 07/23/2014 - 08:33 | 4992202 rsnoble
rsnoble's picture

You're not the first person i've heard mention the $100 per trip thing.  My elderly neighbor (im rural so when I say neighbors they are 1/2 mile or greater) always says that. I knew it was a lot but never really paid attention and you are right.  Of course I live 20 miles from town and most of my vehicles are gas guzzlers so it's practically $20 just for the trip.  Groceries are outrageous and god forbid you are sucked into a $10.00 fast food meal.

$100 is nothing and I completely relate to your fine with sitting at home comment because it's true.  Even buying what you only need is a challenge to keep from spending less than $100.

No inflation though.

Wed, 07/23/2014 - 07:21 | 4992046 rsnoble
rsnoble's picture

If indeed we are in financial warfare a crashing market wouldn't do any good.

Every couple weeks I see a bunch of BS charts calling the top, some idiot like Yellen talks about things being expensive, and it keeps moving higher.  Are they sucking in shorts on purpose?

I have a couple friends short, I am not.  I might pick on a couple individuals but not the broader market.  Sure it looks like it could fly apart anyday.  Is anyday DOW 18K?  20K? Today? Good luck.

Wed, 07/23/2014 - 07:31 | 4992061 GetZeeGold
GetZeeGold's picture

 

 

I have a couple friends short

 

Shorting a bubble? If you were a real friend you would stage an intervention.

Wed, 07/23/2014 - 08:27 | 4992207 rsnoble
rsnoble's picture

LOL.  They make enough money elsewhere if they want to blow a few grand it's not going to hurt them.

Wed, 07/23/2014 - 09:16 | 4992336 BeetleBailey
BeetleBailey's picture

...when everyone least expects it.

September 10, 2001.....no one was expecting shit.....no one.

September 2008 Labor Day....McCain was leading a weak dicked Fuckbama.....we all thought.....and then.....

when you least expect it....

Israel knows this game all too well.....

Wed, 07/23/2014 - 07:31 | 4992065 buzzsaw99
buzzsaw99's picture

janet yellen's plan is that cheap money will lead to M&A which will lead to layoffs which will help the unemployment situation in the usa. [/sarc]

Wed, 07/23/2014 - 07:41 | 4992078 Comte d'herblay
Comte d'herblay's picture

The Big Swinging Dicks among the Wall Street Jewish mafia, are now on summer vacation, in Europe, or on 250 ft. Yachts on the Mediterranean, Pacific,  Aegean, Indian oceans,  so most market activity is on auto pilot, while the Big Dicks spend some of the FED's Trillions they printed for them.

The current activity such as it is, is moot.  Moot is good, too. 60 days more of it, no major changes, unless a Black Swan ( can we still attribute negative consequences to "Black"?? ) should take flight. 

 

Wed, 07/23/2014 - 07:44 | 4992087 fonzannoon
fonzannoon's picture

The black swan is more of the same forever.

Wed, 07/23/2014 - 07:49 | 4992093 overmedicatedun...
overmedicatedundersexed's picture

too many today still think one makes money in the markets, ah the FED would like you all to know, THEY make money, you borrow it and pay the debt back- tax is used to balance the Feds books

Wed, 07/23/2014 - 07:48 | 4992094 BeetleBailey
BeetleBailey's picture

Been tracking the volume

Up days: feather light

Down days: Heavy Eddie....big positions taken in short funds....then when the market ramps up (BTFD) - light volume = no selling of those positions.

Takes months sometimes....years boys and girls...for the fat cat fucks to position themselves for the thorough rinsing and fleecing of the unwashed and the "not-so-in-crowd".

When? Who the fuck knows.

Looks like the YOU-CRANE false flag downed Malay shoot-out of the sky was not the ingiter...

...something more.....spectacular needed....

 

Wed, 07/23/2014 - 08:30 | 4992217 rsnoble
rsnoble's picture

It's been that way for sometime.  There's several sayings, The bus moves faster with fewer passengers, When the cat's away the mice will play etc.

With few participants it's easy to push the markets around to your liking.

Wed, 07/23/2014 - 07:49 | 4992096 oudinot
oudinot's picture

Tyler you are wrong that Europe cannot stop  "Russia dominating" .  They see Russai as integral to thier future growth, America not so much in the 'economic beauty pageant'.

In 1814 it was principally Russian troops, under Czar Alexander I that took Paris and Napoleon abdicated.  Russia , for three centuries has been a major European power.

 Europe ,always opportunists see Russia, China, the East  as the 'golden goose' of tomorrow.  America had been the golden  goose since world war 2, now, its the ugly duckling.

And when the American government , thinking still that they are the undisputed super power, tries to throw its weight around by fining European banks ($8.9 billion to Fench BNP) further alienates itself.  The Europeans understand that the US dollar will not be the reserve currency in 10 years.  

America's ubiquitous foreign policy mistakes:  Iraq, Afghanistan, support of Israel, obvious Russky bashing, have left them wary of being America's ally.

Wed, 07/23/2014 - 07:54 | 4992104 buzzsaw99
buzzsaw99's picture

beg, borrow, and steal bitchez. europe won't rid itself of the usa maggot parasites easily.

Wed, 07/23/2014 - 07:56 | 4992110 overmedicatedun...
overmedicatedundersexed's picture

oudinot, you seem to think there are leaders in America who view what they do as a means to keep America on top, sorry to say, that is so last century thinking, try NWO and CFR on for size..just saying...

Wed, 07/23/2014 - 08:28 | 4992212 TabakLover
TabakLover's picture

I love how the markets have recovered everything from the Mylasian jetliner / Gaza down day............  and yet when Kerry rigs some BS ceasefire the markets will shoot up on that "great news".   Have a crisis......... fix the market reaction, then fix the crisis, to pump the market more.

Wed, 07/23/2014 - 10:47 | 4992709 Sauerkraut-Opinion
Sauerkraut-Opinion's picture

ZH: "...incapable of stopping Putin from dominating Europe..."

...I fear it's not incapacity but displeasure. This are totally different things.
Would Washington cancel it's whole economic relations with Canada, Mexico or even Saudi Arabia regarding to comparable reasons which you can't resolve in Washington nor Berlin?

That has nothing to do with a 'Europe dominated by Putin' (perhaps you mean former Sovjet terrain in Asia - for many people far away - exept of East-Ukraine which is part of Europe - but still former Soviet terrain), but geopolitical neighborhood, mutually comprehension (regarding history) and grown economical relations since the Berlin wall came down. Moskaus withdrawal has still another dimension compared to it's (unacceptable) support of East-Ukraines seperatists. Both sides in Ukraine are supported by East and West and this problem can only be solved within the Ukraine itself.

On one side in Berlin and elsewhere in Europe exists an official language regime (...to calm Washington) - on the other side an unspoken deep comprehension for some Russian positions. There are a lot of historical reasons that might be not comprehensible within the U.S. medias and government (...and by the way everyone who knows Merkels way of politics she likely has not forgotten Obama unwilling to stop (uncontrolled) spying - it's just unspoken and now used as a dead pledge to say ones more "sorry". Supposedly the Russians are delighted to deliver more confident infos to German authorities).

Angela Merkel will manage it her own way: By a diplomatic but self-confident and persistent manner.

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