11th Jul - US Close: Just a minute...

Big news of the day were the planned budget cuts in Spain and the Fed’s FOMC minutes that were less dovish than expected. Meanwhile, earnings picture is looking bleak – what else would one suspect with the global macro being what it is? EURUSD and S&P are near support levels and are ok short-term buys. For more, see today's earlier US Open: Fed wait and  EU Open: Buying Opportunity. EDIT: Added couple of new ones to Fed comments.

News – Between The Hedges

Markets – Between The Hedges

Recap – Global Macro Trading

The Closer – alphaville / FT

Market Commentary – A View From My Screens

Tyler’s US Summary – ZH

  Despite Low Volume Schizophrenia, S&P Extends Losses To 5th Day

TV: Bloomberg, CNBC, BBC

Debt crisis: live – The Telegraph

The Euro Crisis Blog – WSJ

Tracking Europe’s Debt Crisis – NYT

FX Options Analytics – Saxo Bank

European 10yr Yields and Spreads – MTS indices

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EURO CRISIS

Understanding TARGET: The Eurosystem’s Euro Payment System from an Economic and Balance Sheet Perspective – OENB (pdf)

Austria’s central bank paper is “one of the best explainer” of TARGET2 according to Alea.

EURO CRISIS: SPAIN

Just another scary Spanish capital flight chart – alphaville / FT
Since the middle of last year, this has been a one-way show, with capital leaving Spain apace. Capital inflows have been almost non-existent. Indeed, Yiagos Alexopoulos at CS reckons outlflows are currently running at an annualised rate of 50 per cent of GDP.

Pointless Pain In Spain – Krugman / NYT

So, Rajoy is imposing harsh further austerity that will raise unemployment while making no significant dent in either the fiscal problem or the competitiveness problem. And this makes sense why?(more on Spain’s budget cuts BB, BB)

Bad medicine – Free exchange / The Economist

this is incredibly counterproductive. The Spanish economy is imploding. Without the ability to offset these cuts with a very aggressive monetary policy, the multiplier on this austerity will be substantial…The aim is to demonstrate a willingness to suffer great enough to convince Germany you're worth sharing risks with.

Spain gives austerity another shot. But why? – Wonkblog / WP

Longer article summarizing other pieces, with the same main points as the ones above.

FED

The Puzzling Pre-FOMC Announcement “Drift” – FED NY

Our findings suggest that the pre-FOMC announcement drift may be key to understanding the equity premium puzzle since 1994. However, at this point, the drift remains a puzzle.

Before:

Fed Intervention and the Market: A Snapshot Before Today's FOMC Minutes – dshort

Chart Of The Year: The Fed Has Doubled The S&P Admits... The Fed – ZH

Four Key Questions Ahead Of The FOMC Minutes – ZH

Goldman Sachs: the minutes may provide more information about whether the weak data that have arrived since June 20--another subpar payroll gain of just 80,000 and sharp declines in high-profile business surveys such as the manufacturing ISM and the Philly Fed--are likely to be sufficient to trigger additional moves.

After:

FOMC minutes for meeting of June 19-20 – alphaville / FT

Additional policy action could be warranted  if economy loses momentum – Calculated Risk

Few Fed Members Said More Stimulus Would Be Needed – ZH

Not a Smoking Gun – Tim Duy’s Fed Watch

Divided views – Danske Bank (pdf)

Some on FOMC Said More Stimulus Probably Will Be Needed – BB

OTHER

Profit Growth? Not This Earnings Season – MarketBeat / WSJ

Analysts currently expect second-quarter earnings growth for S&P 500 companies to come in at a negative 2.1% rate