Spanish CDS trading above 500, and looks like the Spanish 10-year yield will close above 6% as well. It is going to be an interesting week. You can keep in touch with "MoreLiver" through Twitter, Facebook, email, paper.li, and here’s what I posted during the weekend:Weekly Support
Best of the Week
News And Market Re-Cap – RanSquawk / ZH
Frontrunning: April 16 – ZH
The Lunch Wrap – alphaville / FT
EM New York headlines – beyondbrics / FT
Morning MarketBeat: Here we go again – MarketBeat / WSJ
Morning Take-Out – DealBook / NYT
Daily Press Summary – Open Europe
Sarkozy supports changing Maastricht Treaty to allow ECB to support eurozone growth; 66% of Greeks want to stay in the eurozone but under a reformed troika plan
Debt crisis: live – The Telegraph
Europe Crisis Tracker – WSJ
FX Options Analytics – Saxo Bank
EURO CRISIS
Euro zone looks to Washington – MacroScope / Reuters
Aside from Spain, everything builds to the big IMF meeting in Washington at the back end of the week…The first round of French presidential elections are unlikely to move markets unless one of the two frontrunners is stunningly knocked out.
George Soros speech summary, I featured this in my Weekender posts, but you probably did not read it. Full pdf here
BizDaily: French elections 16 Apr 12 – BBC (mp3)
Europe's financial storms have been picking up again after a spell of calmer weather, just as one of its largest economies, France, is about to hold the first round of presidential elections. Emma Jane Kirby reports from Paris on Nicolas Sarkozy's campaign for a second term. Plus, Lesley Curwen talks to Dr Gemma Calvert, a founder of Neurosense which uses brain imaging to measure reactions to companies' products. And Lucy Kellaway of the Financial Times argues banks should resist the temptation to brag openly about their ethics.
So it’s hard to avoid a sense of despair. Rather than admit that they’ve been wrong, European leaders seem determined to drive their economy — and their society — off a cliff. And the whole world will pay the price.
Return of the Stability and Growth Pact – alphaville / FT
Citi: While it is possible that some institutional bias towards blaming peripheral countries for being responsible for the crisis will persist for some time, there appears to be a growing swell of support to investigate what should be done in the ‘surplus countries’ to avoid creating an excessively large gap that others would find impossible to reduce.
Citi: While it is possible that some institutional bias towards blaming peripheral countries for being responsible for the crisis will persist for some time, there appears to be a growing swell of support to investigate what should be done in the ‘surplus countries’ to avoid creating an excessively large gap that others would find impossible to reduce.
Sarkozy: Europe must purge its debts, it has no choice. But between deflation and growth, it has no more choice. If Europe chooses deflation it will die. We, the French, will open the debate on the role of the central bank in the support of growth.
A Top Euro Banker Calls for Boost to IMF – WSJ
German Official's View at Odds With U.S., Developing Nations
EURO CRISIS: SPAIN & ITALY
Coming up with €163bn to keep the Spanish banking system afloat – Sober Look
Bringing the debt home, Italian and Spanish banks edition – alphaville / FT
So the conclusion is that Italy is more vulnerable, especially if non-domestic investors or non-bank domestic investors are unwilling to roll over their maturing debt. Spanish banks have enough LTRO funds to absorb both sovereign and their own funding needs up until July/August. But the picture for Spain could become more problematic if deposit outflows (which averaged €10bn per month over the past 9 months) continue.
JPMorgan believes market is demanding more LTRO, and thus it will push for it.
OTHER
China’s FX policy and the elusive rebalancing – alphaville / FT
Deutsche: A flexible exchange rate is a necessary condition for opening up China’s capital account Nomura: The widening of the exchange rate band is a major step toward a more flexible and market-driven exchange rate regime, which complements other reforms toward capital account liberalisation and interest rate liberalisation, and makes more financial reforms plausible down the road.
Deutsche: A flexible exchange rate is a necessary condition for opening up China’s capital account Nomura: The widening of the exchange rate band is a major step toward a more flexible and market-driven exchange rate regime, which complements other reforms toward capital account liberalisation and interest rate liberalisation, and makes more financial reforms plausible down the road.
When Does This Travesty of a Mockery of a Sham Finally End? – of two minds
Intersecting global crises cannot be papered over with artifice and propaganda for long.
Speakers include John Kay, Richard Koo (from Nomura). Managing the Global Commons- Creating a Socially Useful Financial System - Instability in Financial Markets - Inequality and the Challenge of Employment - Where do we go from here?
Overnight Sentiment: Nervous With A Chance Of Iberian Meltdowns – ZH
Comments for the week from SocGen, Citi, Morgan Stanley, Bank of America