ECB Deposit Facility Hits €299 Billlion, And Other Key Overnight Session Updates

With few notable highlights in the overnight session which has seen futures do the good ole' melt up, the key event being the Italian 10 Year hitting a new all time record yield of 6.73% and a spread to bunds of just under 500 bps, since retracing following even more alleged ECB intervention, the market is in wait and see mode in expectation for the main event of the day: the vote on the Italian budget plan, which will most likely confirm that Berlusconi has far more than 9 lives, if only for the time being. Attached is Bloomberg's TJ Marta summary of the relevant other overnight events as well as what to expect.

  • Italy’s Chamber of Deputies will vote at 9:30am EDT on routine report regarding last year’s budget plan; will determine whether Berlusconi retains a majority in the 630-seat house and can push through austerity measures
  • Italian yields have crossed “dangerous line”, with 10-yr yield rising above those of Greece, Portugal
  • Italian to German 10-yr yield spread 6.3bps tighter from yesterday’s record 488bps; most other EU sovereign spreads to Germany modestly tighter overnight
  • Asia equity indexes mixed in modest ranges; EU bourses up modestly, 0.8 to 1.5%; U.S. futures +0.2 to 0.5%
  • German bond yields moderately higher, led by 2-yr +4bps, Treasury yields mixed, -1.5bps to +0.1bps, with curve flatter
  • FX mixed in modest ranges, with slight skew towards risk aversion as C$, A$, underperform

And while we know that facts don't matter, here is the main chart we could find to start the day, which summarizes why things in Europe are unlikely to get better any time soon: the amount of cash parked by European banks with the ECB just hit €299 billion, the highest since May 2010.