22 Jun 2012 – " Shot Down in Flames" (AC/DC, 1979)

22 Jun 2012 – " Shot Down in Flames" (AC/DC, 1979)

http://youtu.be/nZ2YJm03Oqc

What a Summertime bluesy evening session it was! First Twitter went down, which meant there were no means to complain online that something had gone down, especially Twitter. Then US equities, commodities and the euro came down crashing. Then Moody’s went medieval on 15 global banks, as rumoured throughout the day, but totally ignored by all. Bad start into the sunny season... In the light of the 2nd worst US close of the year, and US stocks closing below their 50d average, Asian ROff was about contained, knowing that Mainland China was closed for Dragon Boating, which was probably just as well.

No major data to kick off the end of the week, with mid-morning Germany’s IFO the only major set today in sight and with equally no US data to game on this afternoon.

Spain out with the first two audit results on banks, which one will chew on, while awaiting the Spanish call for bail-out (Mañana, mañana. Probably Monday), which in turn will probably depend from the results of further weekend talks with Germany, France and Spain meeting in Rome to haggle it out. Given the Irish experience, markets will take those audit results as being too optimistic anyway, while some of the adverse scenario stress inputs are already daily reality. Knowing that the EUR 50-60bn possible capital needs in an adverse scenario rely on recurrent equally high profit generation capacities, that number might still be up for interpretation. EZ politicians seemingly waking up to the subordination question yesterday, which happened to have been the one roiling the Spanish market off late (…). Never too late.

European equities down 1% plus at open, which, as for Asia, still seems decent, and still slightly up on the week, unlike the US or commodities. Uneasy ROff / rough market behaviour with the Periphery opening wider by 10 bp and the other EGBs only tighter by a tick or two. Players nevertheless still shaken by the Bund’s now shaky save haven status, as “if even the lifeboat starts to leak”, while Gold has suddenly become so passé. 

IFO figures just put in a nutshell what all sentiment indicators have shown this week: Yes, we’re past the high point this year and heading for trouble. Business Climate was a small miss at 105.3 (fcst 105.9 after 106.9) and the Current Assessment was rather better than expected at 113.9 (fcst 112 after 113.3, revised 113.2), but it’s the Expectations component that was a drag at 97.3 (fcst 99.9 after 100.9, revised 100.8). Feels like “Danke, we’ve just sent out the last shipments, but our order books are blank now...”. That’s Oct 2011 gloom. Before that Summer 2009. Thing is, in Summer 2009 these levels were attained coming out of the post-Lehman dip and heading higher. Last shipments back and forth might as well behind the late Baltic Dry recovery.

Unsurprisingly, Italian consumer confidence hit a fresh record low in June, down to 85 (fcst 86 after 86.5).

Morning session in ROff mode, but nothing panicky. Late morning comments that nothing would be decided at the Rome meeting, outside the dining menu.

On the positive side, DBRS maintained Spain’s rating (as well as Italy, Portugal and Ireland), albeit with a negative outlook, and will decide by late-August what to do. This will keep Spain out of the BBB ECB haircut bucket for the moment (Would have added 5%). Good for a 15 bp turn around in Spanish bonds, bringing the later back to 6.50% and helping Italy to stop widening.

Helped as well to ease ROff mode, flooring some of the equity losses at lunchtime. Credit by and large unchanged, including Financials, which had widened some 7-8 bp before cooling off, shrugging that the Moody’s move was totally discounted.

ROff morphing to RN (Risk Neutral).

Yesterday’s call on the commodities wasn’t that bad, timing-wise. Commodity charts look bleak: Support for Gold probably in the 1480-1500. 310 for Copper. 78 for WTI, then probably 72-area; 84, then 73-area for Brent. Broader CRB is sitting on a 265 support, then 240. Roughly, either it holds around here - or it looks like another 5-10% lower.

No government supply. Will have on Monday Belgium with EUR 2.8bn in 5, 10 & 20 YRS (last month had 2.38% & 3.45% for 5s and 10s), as well as EUR 3bn German 1 YR (last 0.026%) and French EUR 8.4bn 3,6 & 12m bills (last 0.058%, 0.094% & 0.19%).

No US data to close the week.

Afternoon titbits: Initially, announcement that no bond holder haircuts were due for Spanish banks, but then at least for junior bond holders, then again not. Unclear. Given what was visibly sold to Retail as safe investment, that one might need to be fine-tuned. Cash limits of EUR 2.500 in Spain to fight fraud, which doomsters will certainly interpret as an attempt to pre-empt any bank run, or worse, as preparation in case of any Spexit. Greek’s new PM to undergo eye surgery, sparing him from watching the match against Germany as well as reading the firm Nein on bailout terms amendment propositions. Followed a couple of hours later by the new Greek FinMin. Same strategy?

Afternoon morph into slight ROn, in absence of bad news, as well as positive +0.5% NY open. Some further support from the ECB, now taking A- rated ABS and CMBS issues with a 16% haircut, as well as and BBB ABS and RMBS at 26% and CMBS at 32% haircut as collateral on board. Football player contracts, too? Immediately followed by a piqué BuBa reaction, that was later pushed as far, as stating it would NOT participate in that.

EGB curve twist with the Core slowly, but surely shot down again (Bunds +7 to 1.60%), while Spain maintains itself well below 6.50% (-15 to 6.40%).

Had eventually a joint press-conference by GE FR IT & SP, disclosing a push for a 1% EZ GDP growth package (some EUR 125bn), supported by Merkel, but immediately repeating calls for tighter integration and oversight... and that direct bank funding was NOT possible. So back to Square 1 options: Liquidity into FROB, increasing Spain’s debt ratio by as much. There goes all the positive effect from that Panacotta as dessert. Short joyful EUR spike, and that was it then. EGBs firming back a little. Spain getting tighter by the hour, nevertheless, as probably no one wants to fight such move on a Friday afternoon.

New Issues ROff Friday morning action, hence nothing outside another EIB tap for EUR 250m of a 7-year FRN at 3mE +38.

Closing levels:

10 YRS Yields: Germany 1,58% (+5); Luxembourg 1,90% (+4); Swaps 1,98% (+3); Finland 2,03% (+4); Netherlands 2,09% (+5); EU 2,38% (+3), Austria 2,41% (-2); EIB 2,58% (+3); France 2,59% (-5); EFSF 2,72% (+2); Belgium 3,15% (-3); Italy 5,77% (+5); Spain 6,31% (-25).

10 YRS Spreads: Luxembourg 32bp (-3); Swaps 41bp (+1); Finland 38bp (-2); Netherlands 51bp (+1); EU 80bp (-3); Austria 83bp (+0); EIB 100bp (-3); France 101bp (-5); EFSF 115bp (-3); Belgium 157bp (-1); Italy 419bp (+6); Spain 473bp (-37).

EUR swap curve 2-5 YRS 48bp (+2,0); 5-10 YRS 64bp (+2,0) 10-30 YRS 26bp (-1,0). Curve is steepening.

2 YRS German BKOs closed 0,130% (+3,1) and 5 YRS OBLs 0,64% (+4). New BKO high.

Main at 170 from 169 (0,6% wider); Financials at 276 after 274 (0,7% wider). SovX at 295 from 300. Cross at 680 from 681.

Stoxx Futures at 2181 / -0,6% (from 2194) with S&P minis at 1324 (-1,1% from 1339, at European close).

VIX index at 19,2 after 17,0 yesterday same time. Still surprisingly low given yesterday’s bashing.

Oil 79,2/90,6 (WTI/Brent) from 79,4/90,6 (-0,2%/0,0%). Gold at 1562 after 1572 (-0,7%). Copper at 330 from 331 (-0,3%). CRB closes 268,0 from 270,0 (-0,7%). At best, stable on the lows...

Baltic Dry fixed unchanged at 978.

EUR 1,253 from 1,258

ECB deposits at EUR 769bn after EUR 780bn.

Greek bonds guesstimates: Greece stable with 2023s at 26.5% and 2042s at 22.25% after 22% 

(20.25% and 16.75% before the first election round).

All levels COB 17:30 CET

On the week (compared to Fri 15 Jun COB):

And another epic week to close the Spring session. We ended last week going “Hey Hey, My My (Into the Black)” (link) and headed into the weekend, unsure what Greek elections would yield and whether or not Spain was saved. As soon as it was clear that an immediate Grexit was off the table, the cursor came back to the Spanish woes, sending BONOs soaring past the 7% “tipping point” that used to be the “Rescue Me” (link) trigger and hitting 7.25%, as rumours the audit reports would show needs up to EUR 150bn. Still, the G20 was still going on and rumours all would be well managed to get things coolers, so cool that the Periphery tightened back and that the whole remaining EGB curve got trashed, as “If I Ever Lose My Faith In You“ (link) brought fundamental doubts about who might end up paying the bills. Markets danced on Wednesday, together with Chairman Ben, but in a “Land of the 1000 Dances“ (link), despite a decent short end auction, the Core remained soft, quite Tote Hose (dead pants)  and only a short Twist came out. Spain, in the meanwhile, put in a grandiose Flamenco on the floor and tightened by about 30 basis points.  “Summertime Blues“ (link)) was all we got to start the Summer, while still muted in Europe. ROff wreaked havoc in the US.

On the week, we cannot but note the superb recovery of Spain, which has made back some of the lost ground the week before and especially from the all-out capitulation on Monday (closing the week at 6.31% after 6.86% last Friday and 7.25% this Monday). Core EGBs remain by and large fragile. Always good for some flight to quality, but the binary “ROff / Core yields down” pair doesn’t work anymore (for now). Worst performers of the week? Germany, Finland, the Netherlands. Best performer outside the Periphery? France.

One would add as well that the panicky flattening has stopped, too, and thus higher credit premia are paid along the curve.

Credit eventually treaded water, as did equities on a week-on-week vision. VIX, despite the ups and downs got trashed, given an underlying trust that, somehow, the CBU (Central Banks United) will fix things.

This sentiment is not shared by the commodity market, which is THE BIG LOOSER of the week.

10 YRS Yields: Germany 1,58% (+13); Luxembourg 1,90% (+7); Swaps 1,98% (+10); Finland 2,03% (+15); Netherlands 2,09% (+15); EU 2,38% (+4);Austria 2,41% (+8); EIB 2,58% (+6); France 2,59% (+1); EFSF 2,72% (+5); Belgium 3,15% (+7); Italy 5,77% (-15); Spain 6,31% (-55).

10 YRS Spreads: Luxembourg 32bp (-6); Swaps 41bp (-2); Finland 38bp (-5); Netherlands 51bp (+2); EU 80bp (-9); France 101bp (-12); EIB 100bp (-7); EFSF 115bp (-7); Belgium 157bp (-6); Italy 419bp (-28); Spain 473bp (-68).

Greek bonds guesstimates: A bit better on the week with 2023s down to 26.5% from 27% and 2042s at 22.25% from 22.75%. (20.25% and 16.75% before elections).

Swiss 2-years had a rough time mid-week and trade out to -0.28%, but at the end of the week, profiting from global mistrust for anything, closed about unchanged around -0.32%. 5 YRS didn’t fare that well and crashed from -0.03% out to +0.03%, back to 0% and recovered to -0.01% from a weak morning note at +0.02%...

EUR swap curve 2-5 YRS 48bp (+5,0); 5-10 YRS 64bp (+6,0) 10-30 YRS 26bp (-1,0).

2 YRS German BKOs closed 0,13% (+6) and 5 YRS OBLs 0,64% (+12), on the week.

Main at 170 from 175 (2,9% tighter ); Financials at 276 after 279 (1,1% tighter). SovX at 295 from 318. Cross at 680 from 678.

Stoxx Futures at 2181 / +0,6% from 2167 with S&P minis at 1324 / -0,5% from 1331, at European COB last week.

VIX index at 19,2 after 22,3 last week. Odd equities, US behaviour. Odd VIX. Odd equity traders hoping for CBU.

Oil 79,2/90,6 (WTI/Brent) from 84,0/98,0 (-5,7%/-7,6%). Gold at 1562 after 1627 (-4,0%). Copper at 330 from 340 (-2,9%) . CRB closes 268,0 from 273,0 (-1,8%). What a bashing!

Baltic Dry jumping to 978 from 924 (+5.8%), topping the previous week’s 5.4% rise. Back to life! Back to life! BUT, big caveat, for the last 10 years or so, there was quite some seasonality in that index, mostly peaking just before the summer break industrial lull. So, these might be the last cargoes booked, before trailing off at least until Fall. And who knows how things will look like in Fall? Or next week, as it stands?

EUR 1,253 after 1,264 last Friday

All levels Friday COB 17:30 CET

Next Week:

Summer starts for good. Q2 ends for good (all major global equity indices down 5 to 15%). EU Meeting at the end of the week.

Monday Belgian EUR 2.8bn auction in 5, 10 & 20 YRS (last 2.38% & 3.45% for 5s and 10s), as well as German 1 YR (last 0.026%) and French 3,6 & 12m bills (last 0.058%, 0.094% & 0.19%).

Germany: Mon Cons Conf fcst 5.6 after 5.7 Wed Imp Px fcst 2.3% unch YoY & CPI fcst 2.1% after 2.2 % YoY Thu Unemployment Fri Retails Sales fcst 2.3% after -3.8% YoY

France: Tue Cons Conf fcst 89 after 90 & Jobs Fri PPI fcst 2.7% unch YoY Cons Spending Fcst 0.1% after 0.4% YoY Final Q1 GDP 0.3%

EZ: Thu Biz Climate fcst -0.81 after -0.77, Final Cons Conf, M3 fcst 2.2% after 2.5% and CPI 2.4% unch YoY

Periphery: IT Tue Retail Sales Wed Biz Conf fcst 85.5 after 86.2 Thu PPI & CPI SP Mon PPI Tue Budget Wed Retail Sales fcst -7.9% after -9.8% Thu Housing permits & CPI

US: Mon New Homes fcst 346k after 343k Tue Case Shiller Cons Conf fcst 64 after 64.9 Wed Durable Goods fcst 0.5% after 

0% Thu GDP & Claims Fri Pers. Income & Spending Chicago PMI Michigan Conf

Asia: China leading indicators Japan Thu PMI & Retailers

Click link on title or below for today’s musical support:

http://youtu.be/nZ2YJm03Oqc 

(One of the best live show taping that ever existed: AC/DC “Let there be Rock, Paris Dec 1979”)

21 Jun 2012 – " Summertime Blues" (The Who, 1969)

21 Jun 2012 – " Summertime Blues" (The Who, 1969)
http://youtu.be/iem5TUVxpQI

It’s summer now. And obviously things are not changing, as of today, as the weather is grey and markets are mellow. Ben only half delivered with a 6-month Twist extension, but eventually no one, except equity markets, really believed there would be anything more grandiose than that. Keeping powder dry. Still, given the ramp up in risk going into yesterday’s FOMC, the disappointment was fairly muted. US equities fizzled out from their highs, but closed barely negative. Asian session mixed, some up, some down, with China most hit at -1.5%, following a flash PMI taking us down to a 7-month low at 48.1 (after 48.4).

Opening quotes mostly unchanged and uninspiring, but for Spain, who’s still staging its own on catch-up rally (ahead of its auction). Equities a touch lighter.

The most striking changes to yesterday’s COB are in commodities, which got slammed by rising Oil stocks, still non-QE reeling Gold and China-disappointed Copper.

WTI at $80 looks really pale. With the exception of the post-Summer 2011 dip, that brought us down to $78 for a couple of days, we’re back to 2010 lows in Q1 and Q3. As it happens, expressed in EUR, levels are similar with the currency then trading in the 1.25-1.30, too. Happens to also be true for Copper in the 325 area.

Interesting chart formations on both. It’s basically make or break: if we don’t hold here, triggering lower levels would bring us back to post-Lehman 2009 depression levels. Might not please commodity producers. Geopolitical risk totally underpriced, too.

It’s PMI day: French figures slightly better than expected both for Manufacturing and Services at 45.3 and 47.3 (fcst 44.5 and 44.7 after 44.7 and 45.1, hence stabilizing on low levels). The last time we had readings at 50 and above was during Jan to Mar 2012. German PMIs bleak with Manu at 44.7 (fcst 45.2 unch) and Serv at 50.3 (fcst 51.5 after 51.8). Here again Summer 2009 levels... EZ PMIs actually in line or better with Composite unchanged at 46 (fcst 45.5 after 46), Manu at 44.8 (fcst 44.8 after 45.1) and Serv at 46.8 (fcst 46.4 after 46.7).

EZ Consumer Confidence down to -20 from -19.3. Guess what... Summer 2009. 

Why is that Summer 2009 reference always creeping back??? (Fittingly The Black Eyed Peas were way up in the dance charts with... Boom Boom Pow. Oh, and that Jacko-guy passed away...).

Had the yet-to-be-auctioned Spanish bonds tightening to 4.85%, 5.53% and 6.18% ahead of results (down from 4.97%, 5.65% and 6.28% yesterday evening).

Eventually, results showed total sales of EUR 2.2bn (versus expected EUR 2bn) with EUR 0.7bn in 2s at 4.71% (from 4.34% 2 weeks ago), EUR 0.9bn in 3s at 5.55% (from 4.38% mid May) and EUR 0.6bn in 5s at 6.07% (from 4.96% early May).

Bid to cover ratios excellent, but tails still too big with 8bp in 2s, 5bp in 3s and 12bp in 5s. There must have been very stern calls put in to get that overbidding.

Unfortunately for the auction bidders, results were about 75bp tighter on average than their Monday highs (5.45%, 6.20% and 6.80%), 20bp than yesterday evening and about 10 than this morning.

Unfortunately for Spain, these are nevertheless record-high funding levels... So no one’s really happy here. 

France fared better with EUR 8.5bn sold at 20 to 30 bp below May’s auction with EUR 2.8bn 2s at 0.54% (from 0.74%), EUR 1.2bn 3s at 0.83% (versus 1.09%), EUR 1.1bn 4s at 1.05% (versus 1.37%) and finally EUR3.4bn 5s at 1.43% (versus 1.72%). La vie en rose... Had a final slice of EUR 1.44bn French ILB 2002, 2023 and2027 to round up things, which closes government supply for this week.

Whatever the price tag of the Spanish auction (and its reduced size), the cover was good enough to keep Spanish bonds on their highs with 10s down to 6.50% (6.60% ahead of the auction and 6.70% at close) and well through the 500 to Bund mark, taking Italy along on the ride, but in less ebullient manner. Morning close on ROn Espana mood, but flattish to heavy everywhere else.

Spain’s targeted 2012 bond issuance of EUR 86bn is now done at 61.4%. So just EUR 33bn more to do…If yields were to remain at today’s average level of about 5.5% and assuming budget calculations were on something like 3.5%, this would add further 0.6% to the deficit. As of 31 May, average cost of the outstanding debt was 4.07% (with average issuance cost at 2.56% in 2010, 3.90% in 2011 and 3.09% YTD in 2012). Waiting for audit results, due after COB. Spailout unheard of during the last 48 hours, but to be formalised thereafter.

Those EUR 10bn Cyprus numbers circulating seem astonishing (2011 GDP EUR 17.761bn Debt 12.720bn, debt/GDP 71.6%).

US final data dump for the week with Claims the now usual miss at 387k (fcst 383k after 386k, increased to 389k), followed by lower PMI at 52.9 (fcst 53.3 after 54), then missed Philly Fed at -16.6 (fcst flat after -5.8) and finally missed Home Sales at 4.55k (fcst 4.57m after 4.62m), but with higher than expected prices at +0.8% Mom (fcst +0.4% after 1.8%) and stronger Leading Indicators at +0.3% (fcst +0.1% after -0.1%). Mixed bag, but all on the softer side.

Otherwise nothing really new. Usual verbal euro pin pong and idea pitching in run-up to next week’s Ecofin: French euro Bonds, then euro Bills support seems to have found its way to a shelf. New things is EFSF/ESM buying. ECB to work on own ratings to avoid DBRS on Spain-style situations. ECB to be softening Collateral criteria. Greek opening bail-out softener discussions with a 2-year delay and no public sector job cuts. Various answers following. Some ROn sentiment getting a push from Schaeuble views on leveraged EFSF buying being possible.

Interesting afternoon action with all EGBs starting to perform after the US figures, while equities were still holding up. Spain not holding below 6.50% and giving back some gains in what remains an extremely solid day. Commodity bashing. EUR down to 1.26. Credit doing quite well, with Financials performing despite abundant talks of an imminent Moody’s bashing round. US market-style behaviour: The worse the news, the higher expectations that the Central Bank will act. But given the latest move…Final flight to quality push in Core EGBs, as equities turned flat to negative again and Credit realized that. Italy ending unchanged. Spain giving back 10 bp from its tightest levels. 2 YRS BKO back through yesterday’s auction levels. Puzzling close on ROff realization.

   

New Issue activity lull with solely EIB working on its tap strategy and raising additional EUR 650m on an existing Sep 2019 deal at MS +46.

Closing levels:

10 YRS Yields: Germany 1,53% (-8); Luxembourg 1,86% (-10); Swaps 1,95% (-6); Finland 1,99% (-9); Netherlands 2,04% (-7); EU 2,35% (-9), Austria 2,43% (0); EIB 2,55% (-9); France 2,64% (-3); EFSF 2,70% (-9); Belgium 3,18% (-1); Italy 5,72% (-3); Spain 6,55% (-15).

10 YRS Spreads: Luxembourg 34bp (-2); Swaps 43bp (+3); Finland 40bp (unch); Netherlands 51bp (+1); EU 82bp (-1); Austria 91bp (+8); EIB 103bp (-1); France 112bp (+5); EFSF 117bp (unch); Belgium 165bp (+7); Italy 420bp (+6); Spain 503bp (-6). So, all that rally on Spain’s own before being eventually joined by everyone else...

EUR swap curve 2-5 YRS 46bp (+0,0); 5-10 YRS 62bp (-2,0) 10-30 YRS 27bp (+0,0).
2 YRS German BKOs closed 0,100% (-4,8) and 5 YRS OBLs 0,60% (-6).

Main at 169 from 169 (unch); Financials at 274 after 276 (0.7% tighter). SovX at 300 from 305. Cross at 681 from 661.

Financials down to 265 before giving back most gains...

Stoxx Futures at 2194 / -0,2% (from 2199) with S&P minis at 1339 (-0,7% from 1349, at European close).

VIX index at 17,0 after 18,8 yesterday same time.

Oil 79,4/90,6 (WTI/Brent) from 83,0/95,0 (-4,3%/-4,6%). Gold at 1572 after 1608 (-2,2%). Copper at 331 from 341 (-2,9%). CRB closes 270,0 from 274,0 (-1,5%).

Baltic Dry at 978 after 972.

EUR 1,258 from 1,271. Had sell-off only starting after the US figures confirmed general softness???

ECB deposits at EUR 780bn after EUR 764bn. ECB deposits still climbing at an unusual pace given the early stage of the reserve maintenance period.

Greek bonds guesstimates: Greece softer with 2023s at 26.5% after 26.0% and 2042s at 22% after 21% (20.25% and 16.75% before the first election round). Start of the game of chicken on softening bail-out terms.

All levels COB 17:30 CET

Friday:
Watch those German IFO figures after the PMI round. Chinese Leading Indicators.

Germany: IFO Biz fcst 105.9 after 106.9 Current fcst 112 after 113.3 Expect 99.9 after 100.9

EZ: Construction -3.8% YoY prior
Periphery: IT Cons Conf fcst 86 after 86.5
US: Nope
Asia: China leading indicators

Click link on title or below for today’s musical support:
http://youtu.be/iem5TUVxpQI
(PMI blues & rainy start into the Summer...)

(Of course, originally 1958 by Eddie Cochran. Well covered, by the Stones, T Rex or Joan Jett, among others...)

20 Jun 2012 – " Land of the 1000 Dances" (Die Toten Hosen, 1997)

20 Jun 2012 – " Land of the 1000 Dances" (Die Toten Hosen, 1997)
http://youtu.be/MY8q1mSHvZ8

It’s not like the G20 was a revelation and while the US closed positive, albeit off highs, Asia once more knew better then to get carried away. Not much overnight data, although Japanese exports and particularly imports grew better than expected (then again you need to buy something with that Yen strength).
Magic of the words with the G-20 supporting EU plans for closer economic union “that lead to sustainable borrowing costs.” By decree??? Doesn’t seem very powerful, does it? It’s like everyone compromising on the fact that looking for growth would be cool...
Whatever... Flattish European open on equities, but a very strong start in Periphery bonds, adding about 10 bp to yesterday’s tightening and getting Italy well off the 6% mark and Spain back through the magic 7, down to 6.90%. LCH Clearnet margin hike on Spanish paper pretty much unnoticed. Then again raising 10s from 13.6 to 14.7%, given the already high base, is no killer anymore. If DBRS were to cut Spain into the BBB bucket, ECB haircut hikes would wreak far more damage.
Credit better a couple of ticks in the wake. Core EGBs softer by up to 4 bp. Everything else by and large unchanged from COB with Gold maybe a little touch softer. Will need some harder facts to hold here, but FED hopes still supportive – at least until tonight.

On the data front: German PPI a tick lower than expected at 2.1% YoY after 2.4%. Dutch consumer confidence tanking further to -40 after -38, an all-time low, beating a -39 reading from Summer 2003 (Can’t remember why so low then). Italian Indu Orders levelling out at -12.3% after -14.3% YoY, but Indu Sales tanking to -4.1% after -3.1% YoY.

Some see-sawing with the Periphery giving back some gains, getting back and pushing further, mirrored by similar Bund movements, with especially Spain getting down to 6.85% and Bunds up to 1.60% before the auction results at the end of the morning.

Had the (in)famous 2 YRS 0% BKO, maturing on a Friday 13th, sold for additional EUR 5bn at 0.10%. (Trading 0.11% before the results, closing 0.086% yesterday), of which EUR 995m were retained for market interventions. Total bids for EUR 7.6bn, of which half unlimited, meaning at market price. 0.001 cts tail (so none).
Actually more than a decent result, given the manic-depressive mood swings. Launched last month at 0.07%, traded as low as 0.025% on 31 May and as high as 0.13% on 13 Jun.

Further short to medium term auction action tomorrow out of France with up to EUR 8.5bn in 2 to 5 YRS BTANs (May levels were 0.74%, 0.95%, 1.37% and 1.72%).

And, of course, drum roll, there will be Spain out for up to EUR 2bn in 2, 3 and 5 YRS (2s auctioned at 4.34% 2 weeks ago, 3 YRS mid May at 4.38% and 5s at 4.96% early May).
Whatever, levels will again be much higher, as the bonds are now trading 4.97%, 5.65% and 6.28% (at 17:30 CET). And, unfortunately for the auction bidders, they’re now about 50bp tighter from their Monday highs (5.45%, 6.20% and 6.80%).

Only set of US data were Mortgage Applications that fell -0.8% after rising 18% last week (volatile figure anyway).

To pass some time, contradictory leaks about readiness for ESM/EFSF bond purchases, Italian and Spanish demands for such, agreements to it, disagreement from others, euro-(now)bills (and no more -bonds). Finland in any case asking for collateral. Usual stuff. Nothing exciting. There’s even a Greek government, which suddenly seems of no interest to anyone any more – until demands to renegotiate bail-out terms will become pressing (as “key issue will be to form a bailout renegotiation team”). Talking of bailout: no further news yet, neither from Spain nor Cyprus (as numbers here seem to grow slowly, but surely). Procrastinating into the summer, in order not to get any Troika guys before the Fall?
Heavy Core EZ EGBs after lunch with Bunds out by 7 to 1.60% and Italy & Spain tighter by 12 to 17, down to 5.78% and 6.83%, and another 5 to greet the US pre-open at 5.73% and 6.78%. And a further final push for Spain after US open to hit 6.70%. Now down 55bp from Monday’s spike.

Not much else to do than watching the EGB curve twist and shake. Talking of Twist, it seems that QE is slightly off the rumour / wish list for the moment (and there goes Gold down to 1600), but Twisting further seems difficult for the FED given what remains as stock. Well, Ben better pulls a cool rabbit out of his hat to justify, where we have settled. Or a dance?
In the meantime, Bunds are “Tote Hose”... Very reminiscent of last week’s Tue and Wed movements (+12, then +7). 50d mavg is 1.503% / 100d 1.685%. Taking the last yield “spike” in March (2.07%) as start of the last leg to the 1.13% (01 Jun) low gives us levels at 1.35%, 1.49% resistances. 1.60% mid. 1.71% and 1.85% support. The actual levels are therefore rather important chart-wise. Next support about 140 figure in futures.
Lack of equity movement is strange. Neither ROn nor ROff. Spanish squeeze going on in parallel shift, so the curve remains relatively flat.

It’s been a cold Spring, but with hot markets. Would be nice to have a hot Summer and cool markets, for a change. However doubtful this might seem... Need to check tomorrow.
   
Rather brisk New Issue activity on the back of yesterday’s ROn day and supportive morning session. Had BNPP printing today’s largest deal with EUR 1.25bn 5 YRS senior paper at MS +150. EFSF was in for a EUR 1bn 7 YRS increase at MS +75. EIB, BNG and AFD joined with smaller taps. Zurich Financial printing EUR 500m 10s at MS +147.
Mixed platter on the corporate side with Italian ENI lightening up a EUR 750m 6 YRS deal at MS +215, Telenor calling in with a double trancher of EUR 500m long 5s and 10s at MS +45 and +80, as well as PSA driving away with EUR 600m long 3s at MS +385.

Closing levels:
10 YRS Yields: Germany 1,61% (+8); Luxembourg 1,96% (+6); Swaps 2,01% (+4); Finland 2,08% (+6); Netherlands 2,11% (+7); EU 2,44% (+4), Austria 2,43% (+4); EIB 2,64% (+3); France 2,67% (+3); EFSF 2,79% (+4); Belgium 3,19% (unch); Italy 5,75% (-15); Spain 6,70% (-29).
Tote Hose for the Core. Swaps, Finland, the Dutch, all back over 2% in 10s. Soft Block stable. Grandiose Spanish performance.

10 YRS Spreads: Luxembourg 35bp (-2); Swaps 40bp (-4); Finland 40bp (-4); Netherlands 50bp (-1); EU 83bp (-4); Austria 82bp (-4); EIB 103bp (-5); France 106bp (-5); EFSF 118bp (-4); Belgium 158bp (-7); Italy 414bp (-23); Spain 509bp (-37).

EUR swap curve 2-5 YRS 46bp (unch); 5-10 YRS 64bp (+1,0) 10-30 YRS 27bp (unch).
2 YRS German BKOs closed 0,150% (+6,2) and 5 YRS OBLs 0,66% (+8). Good auction, bad performance...

Main at 169 from 172 (1,7% tighter); Financials at 276 after 279 (1,1% tighter). SovX at 305 from 312. Cross at 661 from 667. Very odd, Financials, and to a lesser extent, Main were much stronger until noon, to realize then they were on their own?

Stoxx Futures at 2199 / +0,5% (from 2189) with S&P minis at 1349 (-0,1% from 1350, at European close).
VIX index at 18,8 after 17,9 yesterday same time.

Oil 83,0/95,0 (WTI/Brent) from 84,0/96,0 (-1,2%/-1,0%). Gold at 1608 after 1626 (-1,1%). Copper at 341 from 343 (-0,6%). CRB closes 274,0 from 277,0 (-1,1%).
Baltic Dry jumping to 972 from 954 (+1.9%). Back to life! Back to life! BUT, big caveat, for the last 10 years or so, there was quite some seasonality in that index, mostly peaking just before the summer break industrial lull. So, these might be the last cargoes booked, before trailing off at least until Fall. And who knows how things will look like in Fall? Or next week, as it stands?

EUR 1,271 from 1,269

ECB deposits unchanged at EUR 764bn.

Greek bonds guesstimates: Greece stable with 2023s at 26.0% and 2042s at 21.0% (20.25% and 16.75% before the first election round). NB: ND/PASOK/ Dem Left had combined 169 seats after the May 6 elections, 179 now (out of 300). All this for that???

All levels COB 17:30 CET

Rest of Week:
European PMI data and US data dump tomorrow. Chinese PMI.

Germany: Thu PMI Manu fcst 45.4 after 45.2 Services fcst 51.7 after 51.8 Fri IFO Biz fcst 105.9 after 106.9 Current fcst 112 after 113.3 Expect 99.9 after 100.9
France: Thu PMI Manu fcst 44.7 unch Services fcst 45.2 after 45.1
EZ: Thu Comp PMI fcst 45.8 after 46 Construction -3.8% YoY prior
Periphery: IT Fri Cons Conf fcst 86 after 86.5 SP Thu mortgages
US: Thu Claims 386k prior PMI prior  53.9 Philly Fed Home Sales fcst 4.57m after 4.62m Leading Ind fcst +0.1% after -0.1%
Asia: China Flash PMI on Thu, Fri leading indicators

Click link on title or below for today’s musical support:
 http://youtu.be/MY8q1mSHvZ8
(Because there’s not only Twist in life...)

19 Jun 2012 – " If I Ever Lose My Faith In You " (Sting, 1993)

19 Jun 2012 – " If I Ever Lose My Faith In You " (Sting, 1993)
http://youtu.be/EZKppXsqRHo

Somehow, when rumours the CBU (Central Banks United) will do whatever is needed to get things going, players jump on it and we move into ROn, but when the G20 leaks a draft statement that in essence says just the same, it is greeted by a general, worldwide shoulder shrug. Obviously, past experience has shown that G20 meetings tend to be long on words and short on action, while real frontal CBU interventions bend things right - at least for a while. But, ok, let’s live with it... To make it short, the US closed about unchanged, depending on index; Asia gave back some, although not all of Monday’s gains and Europe started about where it closed.

Cautious opening mood. Hard hat to avoid shoe drops. Had the faintest uptick attempt in the Periphery to push tighter from yesterday’s close, but initially to no avail, especially as it seeped that the final publication of the independent auditors’ findings about the state of Spanish banking would be postponed to September And this ahead of the 12 and 18m Spanish bill auction. Unfortunate...
Most indicators simply unchanged by mid-morning with equities slightly biased to the downside. No hard data, outside French biz sentiment and outlooks that came as expected, roughly unchanged from May with a slight downside bias. Slight downside is probably the most fitting “attitude du matin” anyway.

Spanish bill auction unsurprisingly expensive, but done in full with EUR 2.4bn raised at 5.07% for 1 year (after 2.99%) and EUR 0.6bn in 18m bills at 5.11% (after 3.30%). Better bid-to-cover ratios, especially the 18m at over 4, but with a steep 30cts tail on that issue, meaning the lowest served bids (for 60%) were at 5.35%. Happens to be the highest rate ever paid for 12m (Was before 5.02% at its worst in Nov 2011). The Spanish Treasury has duly noted having now covered 58.8% of its 2012 needs. Well, that’s probably before contingent liabilities…
Greece anecdotally selling EUR 1.3bn 3m bills at 4.31% (after 4.34%), but that must run on a domestically closed-shop basis. Finally, the EFSF sold just under EUR 1.5bn 6m at 0.14% (after 0.2% 2 weeks ago).

Whatever, good for a recovery in the Periphery (up to 10 tighter, getting Italy back through 6% and Spain near 7%) to the detriment of the Hard Core (5 softer) and lifting stocks from its lows.
Headline grabbing data in form of German ZEW Economic Sentiment tanking to -16.9 (fcst 2.3 after 10.8) and Current Conditions at 33.2 (fcst 39 after 44.1). ZEW EZ Sentiment equally dipping to -20.1 after -2.4. To round off the gloomy mood, EZ Construction dipped 2.7% / 5% MoM/YoY (Germany down, Spain and Italy very down, Netherlands down, France up).
Feels like when US equities rally after every bad figure, on expectations of outside help just around the corner getting intensified. Odd.

Bund decline post auction feels a little bit like last week’s round of softness. You don’t need much to miss a step here. Periphery recovery on one hand. Had a story about Dutch low-income housing association group Stichting Vestia managing to renegotiate / restructure a hung multi-billion swap portfolio, of which an unwind would have meant receiving tons of ultra-long swaps. But that feels like last week’s story of pension fund requirements getting alleviated. Sure. Possible. But doesn’t feel wholly conclusive.
It’s more like players are on the edge, are running smaller positions given increased volatility and are stuck in this Blade Runner-mooded market.
Will get the (in)famous 2 YRS 0% BKO on tap tomorrow for EUR 5bn (Was launched last month at 0.07% and traded as low as 0.025% on 31 May), as first bond auction of the week, followed by French and especially Spanish 2-5 YRS on Thursday. Closing at 0.09%, traded up to 0.13% on 13 Jun.

Late morning levels holding over lunch period. Equities just a wee bit up, credit a notch tighter, Periphery eventually off tightest levels, but still 7 tighter, Hard Core 5 wider. Commodities unchanged. EUR back up and trading low 26s. Yawn!
 

US housing-related figures showing “only” 708k Starts (fcst 722k after 717), due to strong revision of prior data (up to 744k from 717k) , but a surge in Permits at 780k Permits (fcst 730k after revised 723k). Positively biased. Then again, if the tone becomes too positive, there won’t be any QE3. Need to show some distress.

Early afternoon Periphery tightening sustained with Italy and Spain tickling 6.90% and 7.00% respectively. Hearing CDS basis trades possibly behind the Spanish performance (10 YRS CDS wider by 35 since y’day morning, tighter by 10 off the highs with cash wider by 20 and down 20+ from the highs).

Not much going on thereafter and into NY open, biased to the upside, as seemingly no downside around, and in waiting mode ahead of the FOMC / QE hopes. Might last until tomorrow. Driving European ROn sentiment and EGBs ex Periphery up yield-wise. EGB and swap curve steepening at odds with ROn, though.

Nothing really stunning out of the G20 / political sphere so far, neither good, nor bad. ESM formally passing German High Court. Germany certainly not going soft on Greek aid terms (for the moment). Greek government talks. Spain formally still has not asked for support and whatever support is probably still not drafted...Ah, that conditionality thing. EU wanting to do without rating agencies (That DBRS Spanish rating is still the only one keeping haircuts to shoot up on the short end). Lot of Faith out there in the meantime.
Strong ROn close, especially in equities, although the last couple of basis points on the Periphery seem to be gained cent by cent. Ah, equities..
   
New Issue supply still Germany-dominated, but down to a trickle with Daimler raising EUR 750m 6 YRS at MS +73 and Land Berlin EUR 500m 7 YRS at MS +9.

Closing levels:
10 YRS Yields: Germany 1,53% (+12); Luxembourg 1,91% (+11); Swaps 1,97% (+12); Finland 2,02% (+12); Netherlands 2,04% (+9); EU 2,40% (+11), Austria 2,39% (+4); EIB 2,61% (+10); France 2,65% (+4); EFSF 2,75% (+10); Belgium 3,18% (+6); Italy 5,90% (-14); Spain 7,00% (-12).
Good Soft Core/ AFB performance, while swaps just traded off with Bunds, taking the supras along.

10 YRS Spreads: Luxembourg 37bp (-1); Swaps 44bp (+1); Finland 44bp (-2); Netherlands 51bp (-3); EU 87bp (-1); Austria 86bp (-8); EIB 108bp (-2); France 111bp (-7); EFSF 122bp (-2); Belgium 165bp (-5); Italy 437bp (-25); Spain 546bp (-24).

EUR swap curve 2-5 YRS 46bp (+5,0); 5-10 YRS 63bp (+4,0) 10-30 YRS 27bp (+3,0).
2 YRS German BKOs closed 0,090% (+5,8) and 5 YRS OBLs 0,58% (+11).

Main at 172 from 179 (3,9% tighter); Financials at 279 after 288 (3,1% tighter). SovX at 312 from 319. Cross at 667 from 686.

Stoxx Futures at 2189 / +1,9% (from 2148) with S&P minis at 1350 (+1,2% from 1334, at European close).
VIX index at 17,8 after 21,8 yesterday same time. Wow, what a crash in vol!

Oil 84,0/96,0 (WTI/Brent) from 83,0/96,0 (+1,2%/+0,0%). Gold at 1626 after 1628 (-0,1%). Copper at 343 from 338 (+1,5%). CRB closes 277,0 from 271,0 (+2,2%).
Baltic Dry still steaming ahead with a 954 fixing after 938 (+1.7%). Weak patch getting corrected. Had been at 1165 early May, then drifting lower and rebounding to 1141, before crashing to 872 2 weeks ago.

EUR 1,269 from 1,257. EUR shorts have been reduced lately, but still out there and getting squeezed.
ECB deposits at EUR 764bn after EUR 741bn, certainly crawling back up fast for a reserve maintenance period start.

Greek bonds guesstimates: Greece getting a little softer with 2023s back to 26.0% from 25.75% and 2042s at21.0% from  20.75% (20.25% and 16.75% before the first election round), as Germany seems quite strict on keeping conditions unchanged in the grander scheme of things.

All levels COB 17:30 CET

This Week:
FED on Wed. PMI data on Thu. US data dump on Thu. Spanish and French short to medium term bonds on Thu.
Still light on hard market data, heavy on political agenda (Ecofin, Greece, Spanish bank audit result date, eventually)

Germany: Wed PPI fcst 2.3% after 2.4% YoY Thu PMI Manu fcst 45.4 after 45.2 Services fcst 51.7 after 51.8 Fri IFO Biz fcst 105.9 after 106.9 Current fcst 112 after 113.3 Expect 99.9 after 100.9
France: Thu PMI Manu fcst 44.7 unch Services fcst 45.2 after 45.1
EZ: Thu Comp PMI fcst 45.8 after 46 Construction -3.8% YoY prior
Periphery: IT Wed Indu Orders prior -14.3% YoY Fri Cons Conf fcst 86 after 86.5 SP Wed trade balance Thu mortgages
US: Wed Mortgage application & FOMC Thu Claims 386k prior PMI prior  53.9 Philly Fed Home Sales fcst 4.57m after 4.62m Leading Ind fcst +0.1% after -0.1%
Asia: China Flash PMI on Thu, Fri leading indics

Click link on title or below for today’s musical support:
http://youtu.be/EZKppXsqRHo
(Happens to fit the rather quiet, pop closing mood. Faith lost in either end of the EGB spectrum, sometimes in both...)

18 Jun 2012 – " Rescue Me " (Madonna, 1991)

18 Jun 2012 – " Rescue Me " (Madonna, 1991) 

http://youtu.be/1poomgFht8E

Not a single shoe dropped over the weekend, leading to a healthy Risk On call in Asia with indices up 1.5-2%, with the notable exception of China, where data showed still depressed housing prices and YoY decreases on new homes still seen in 56 out of 70 cities.

Initial European quotes about in line with the mood, but somehow off to a more cautious start. Of course, EZ EGBs about 3 to 5 softer, on ROn, but Periphery bonds just a couple of ticks tighter than Friday evening, as solely the Greek black cloud has momentarily dissolved, but with plenty of Spailout and contagion questions open. European equities up 1.5% and credit tighter by about 5 ticks (a good 2%). EUR hitting the 27 handle.

And now? No eco data to chew on. Waiting for things to unravel on Spailout details, G20, Ecofin... Maybe FED QE. Need for the Greeks to actually form a government that will last. Waiting some more.
So, no, no real fireworks to be expected after all and the downside still to be reckoned with and at 6.80s, 10 YRS Spanish yields are far too near from the 7% tipping point to be comfortable with. And it took less than an hour for the market to realize, shifting the Periphery back wider and by and large all indicators back to Friday COB levels.

Add a further 30 minutes to torpedo Italy back past 6% and to send Spain to a new high at 7.10%, past THE mark (and 5 YRS past 6.50%), as data was published showing bad loans rising further to 8.7% (from 8.3%), the highest in 18 years.
For the rest, we now know the drill: Bunds tighter, equities down, credit back up, EUR back to low 26s. Rumours circulating the audit of the Spanish mortgages books could exceed EUR 150bn obviously no help in this situation and fanning the flames.

Eventually a fatalistic, somehow muted market reaction at these levels, as if everyone were just waiting for the Spanish zapato to fall to move on. And that’s how things settled for lunch.
As anecdote, India’s BBB- rating was cut to negative outlook by Fitch, which in turn will not heightened the BRICS' mood at the G20, as a dip back to junk would be a major slap in the face, seen as triggered by the unruly EZ.

Supply only came in form of bills, first sold by the Dutch for EUR 1bn 3m at 0.000% (unch) and 1.4bn 9m at 0.019% (after 0.014% 2 weeks ago) and then by France with a weekly vertical serving totalling EUR 8.6bn of 1 to 12m at 0.049% for EUR 0.9bn 1m,  0.058% for EUR 4.5bn 3m (from 0.075% last week) , 0.094% for EUR 1.7bn 6m (from 0.129%) and 0.19% for EUR 1.5bn for 12m (from 0.214%).

So all tighter, as even short term money seems to flee into quality.

On tomorrow’s plate: bills again, this time from Greece (EUR 1bn 3m, last 4.34% mid May), Spain (EUR 3bn 12 & 18m, last 2.99% and 3.30% mid May) as well as the EFSF ( EUR 1.5bn 6m, last 0.2% 2 weeks ago).

Afternoon session marked by some added weakness with Spain hitting 7.24% in 10s and equities moving into negative territory for good and credit getting soft, alongside EUR and commodities. ROff.

No US figures outside neutral afternoon NAHB homebuilder data at 29 (fcst 28 after 29, revised 28). Small uptick, but highest level in 5 YRS.

ECB confirmed it didn’t buy any bonds for the SMP last week, which is no surprise. On the contrary, it had EUR 1.4bn redeemed of the existing now EUR 210bn stock).

New Issue supply remained German with Deutsche Post taking the limelight, after an absence of over 8 years, with a 2-trancher of EUR 750m 5 YRS at MS +73 and EUR 500m 10 YRS at MS +115. German EAA tapped an outstanding 3 YRS benchmark by EUR 250m at MS +4, while non-IG Kabel Deutschland raised EUR 400m 5 YRS nc2 at 6.50%.
Had likewise, for yield hunters, BG Energy issuing 50 YRS nc5 hybrids at 6.500% for EUR 500m and GBP 600m (same terms).

Soft close on ROff. Equities and Credit on their lows. 1 YR Germany now trading slightly negative, 2 YRS BKO back to 0.028%

And now?  Spain’s curve is still flattening with 2 YRS now at about 5.50%, 3 YRS 6.00%, 4 YRS 6.30% and 5 YRS 6.75%. While closing 10 bp off the widest level, it’s once more a record high close.

#rescate , as they say on Twitter.

Tomorrow: German and EZ ZEW & Spanish bills. Doubtful more will come out of the G20 than bickering and mutual recriminations.

[Swiss 5 YRS spiked out to +0.02% this morning on ROn, but since back to -0.04% in the close]

Closing levels: 
10 YRS Yields: Germany 1,41% (-4); Luxembourg 1,80% (-3); Swaps 1,85% (-3); Finland 1,90% (+2); Netherlands 1,95% (+1); EU 2,30% (-4), Austria 2,36% (+3); EIB 2,51% (-1); France 2,60% (+2); EFSF 2,66% (-1); Belgium 3,12% (+4); Italy 6,04% (+12); Spain 7,12% (+26).
Added EU as issuer

10 YRS Spreads: Luxembourg 38bp (unch); Swaps 43bp (unch); Finland 45bp (+2); Netherlands 54bp (+5); EU 88bp (-1); Austria 94bp (+6); EIB 110bp (+3); France 119bp (+6); EFSF 124bp (+2); Belgium 170bp (+7); Italy 462bp (+15); Spain 570bp (+29).

EUR swap curve 2-5 YRS 41bp (-2,0); 5-10 YRS 59bp (+1,0) 10-30 YRS 24bp (-3,0).
2 YRS German BKOs closed 0,030% (-4) and 5 YRS OBLs 0,47% (-5).

Main at 179 from 175 (2,3% wider); Financials at 288 after 279 (3,2% wider). SovX at 319 from 318. Cross at 686 from 678.

Stoxx Futures at 2148 / -0,9% (from 2167) with S&P minis at 1334 (+0,2% from 1331, at European close).
VIX index at 21,8 after 22,3 yesterday same time.

Oil 83,0/96,0 (WTI/Brent) from 84,0/98,0 (-1,2%/-2,0%). Gold at 1628 after 1627 (+0,0%). Copper at 338 from 340 (-0,6%). CRB closes 271,0 from 273,0 (-0,7%).
Baltic Dry up to 938 from 924 (+1.5%).

EUR 1,257 from 1,264

ECB deposits at EUR 741bn after EUR 700bn. Oumpf! Quite an increase in deposits ahead of the weekend vote.

Greek bonds guesstimates: Very positive reaction to the election outcome with 2023s back down to 25.75% from 27% on Friday a 28.25% and 2042s at 20.75% from 22.75% (20.25% and 16.75% before the first election round).

All levels COB 17:30 CET

This Week: 
Quite light on hard data and mostly sentiment indicators to start the week. FED on Wed. PMI data on Thu. US data dump on Thu.

All about bills until Wed with German 0% Jun 2014 auction. Spanish and French short to medium term bonds on Thu.
Light on hard market data, heavy on political agenda (G20, Ecofin, Greece, Spanish bank audit results)

Germany: Tue ZEW Eco fcst 5 after 10.8 Current 39 after 44.1 Wed PPI fcst 2.3% after 2.4% YoY Thu PMI Manu fcst 45.4 after 45.2 Services fcst 51.7 after 51.8 Fri IFO Biz fcst 105.9 after 106.9 Current fcst 112 after 113.3 Expect 99.9 after 100.9
France: Tue Company / Prod Outlook Biz Conf fcst 92 after 93 Thu PMI Manu fcst 44.7 unch Services fcst 45.2 after 45.1
EZ: Thu Comp PMI fcst 45.8 after 46 Construction -3.8% YoY prior
Periphery: IT Wed Indu Orders prior -14.3% YoY Fri Cons Conf fcst 86 after 86.5 SP Wed trade balance Thu mortgages
US: Tue Housing Starts fcst 720k after 717k Wed Mortgage application & FOMC Thu Claims 386k prior PMI prior  53.9 Philly Fed Home Sales fsct 4.57m after 4.62m Leading Ind fcst +0.1% after -0.1%
Asia: China Flash PMI on Thu, Fri leading indics

Click link on title or below for today’s musical support:
 http://youtu.be/1poomgFht8E
(Rescue me [rescue me, it's hard to believe] /  I'm drowning, baby throw out your rope...)