As the words were spewing from the mouths of Saenz, Montoro, and Guindos - with little to no substance at all, so EURUSD started to push higher - in a hurry. In today's quiet market, the correlated-monkeys took over and US equities - thanks to weakness in the USD - and Gold and Oil spurted higher. AAPL - as the high beta proxy for all things market - surged 2% (we assume as the Spaniards will need to buy more AAPL stock to fund the shortfalls in their pension funds). The bottom-line is we have fallen for a few days and so a bounce is not unlikely but the timing and size smells very fishy and the front-running of quarter-end front-running wind-dressing front-runners remains a quagmire of circular logic to us. The bottom-line is that the media can now say the words "the market seemed to 'like' what Spain was saying - is the bottom in?" despite there being no news at all.
EURUSD...
Gold is leading and green on the week now - stocks and the USD are tracking perfectly and Treasuries are lagging the exuberance...
The S&P futures though did auction up to a previous high-and-low volume node region in the last few days (see distribution left of chart) - and perhaps just needed to run some stops to flush out any buyers before resuming the down-trend...
Forgive our somewhat jaded view of this budget... but all of this had been leaked over the past few days and in fact ot is somewhat stunniong that it could have any impact as it offers no 'hope' for a bailout request and is pure fallacy when it comes to circular funding of the budget deficit via pension reserves... the need to show a brave face and postivity from the market is incredible...



