The news flow is still very tame. The Fed minutes and the loss in QE expectations keeps the pressure on risk asset prices, while Spain's reactions to budget cuts and Greece's "progress" will probably be the next expected surprises. A nice point from Saxo's Jakobsen: the current deflationary environment is financial repression, just as inflation would be. For more, see last night's US Close: Just a minute... (Fed minutes) US Open: Fed wait (for Spain).
The 6am Cut
London – alphaville
/ FT
Emerging
Markets Headlines – beyondbrics
/ FT
Debt
crisis: live – The
Telegraph
The Euro
Crisis Blog – WSJ
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
AUD and JPY both fell against USD in the Asian session Thursday after
surprises from their respective economies. In Australia it was a large miss on employment figures, while for Japan it was an increase to
its short-term asset purchase programme.
European markets will open lower Thursday after
the minutes of latest FOMC meeting provided no hints of further monetary
easing, Australian labour data missed expectations and Japan increased its
short-term asset purchase programme.
Danske Daily – Danske
Bank (pdf)
Focus today will be on markets digesting the
Fed minutes: with QE3 not yet a done deal, there is enough to worry about in
risky assets for now.
Morning Briefing: A long time ago, in a galaxy
far, far away… – BNY
Mellon
Events in the US a decade ago may
provide an insight into what could happen to the EUR next.
EURO CRISIS
Eurozone's electorate becoming increasingly
polarized – Sober
Look
Ultimately this will make it increasingly
difficult for politicians from the various states to reach consensus as they
face domestic pressures.
The Spanish Hangover (Apr 2012) – CEPS
(pdf)
Nice longer report on what went wrong by good
authors.
Lies You Can Believe In – Mish’s
Anyone who was thinking clearly knew Rajoy's
pledge to not raise taxes was a gigantic lie the moment he spoke the words. However,
few were thinking clearly, not that it matters one iota.
OTHER
Financial repression the new buzzword – Saxo
Bank
Steen Jakobsen:
No form of repression works! Look for
massive outflow from the Eurozone to the non-Eurozone countries. Sweden is the new Switzerland. Look for equities to be gradually more loved as dividends offer better
returns than repressive government bonds.....and look for a summer of
discontent, before the low is seen.
Closer Look At Long Term Trends – Short
Side of the Long
Global equity indices performance over the last
year - Treasury Long Bond is most likely in a blow off bubble - Dollar is now
everyones favourite currency of choice - Gold's record performance could signal
a correction ahead