Italy's prime minister Mario Monti is due to meet Swiss president Eveline Widmer-Schlumpf to discuss tax. While the German chancellor Angela Merkel and her finance minister will be speaking at an economics conference in Berlin.
This is today's agenda:
• Sweden CPI for May: 8.30am
• UK industrial output for April: 10.30am
• UK manufacturing output for April: 10.30am
• Andreas Dombret, board member of the Bunedsbank, speaks: 11am
• French president Francois Hollande speaks: 1.30pm
• UK GDP estimate by NIESR: 3pm
• IMF chief Christine Lagarde speaks: 3pm
• Joerg Asmussen, ECB board member, speaks: 3.30pm
• ECB financial stability review: 4pm
• US monthly budget statement for May: 7pm
• UK industrial output for April: 10.30am
• UK manufacturing output for April: 10.30am
• Andreas Dombret, board member of the Bunedsbank, speaks: 11am
• French president Francois Hollande speaks: 1.30pm
• UK GDP estimate by NIESR: 3pm
• IMF chief Christine Lagarde speaks: 3pm
• Joerg Asmussen, ECB board member, speaks: 3.30pm
• ECB financial stability review: 4pm
• US monthly budget statement for May: 7pm
In the debt markets, the UK is selling five-year Treasury gilts. Austria is selling €1.1bn of 50 and 10-year bonds and the Netherlands is selling €1.5bn-2.5bn in 20-year bonds. Belgium, Greece and the US are selling short-dated treasury bills.
4 comments:
European shares are probing gently higher in early trade as market-wide risk sentiment trends cautiously return to a neutral setting after Monday's seesaw volatility to await the emergence of the next catalyst for price action. S&P 500 stock index futures are pointing higher, hinting more of the same as Wall Street comes online.
The bi-annual ECB Financial Stability Review looks to be the most significant bit of event risk on the economic calendar. While traders are unlikely to be particularly surprised by the risks that the central bank will probably identify, the intense focus on eurozone-linked instability can nonetheless make for a sharp reaction from price action in the absence of other major drivers.
An unnamed Irish minister has said that the "Spain bank deal doesn't appear to have worked".
Bond yields are up and markets fell yesterday after the inital joy over the bailout wore off.
Has the EU inadvertently triggered a Spanish default event ?
"More worryingly, for holders of Spain’s national debt, this new bank-bailout debt (which is owed by the country of Spain, remember, since the money isn’t going directly to the banks) carries something known as preferred creditor status. That means that if push comes to shove, Spain will repay the bailout debt before repaying any of its bonds.
Now here comes the CDS angle: if this subordination is written into European law, does that mean that the Europeans just subordinated Spain’s bondholders? Because if they did, then that might count as a credit event, and allow anybody holding Spanish CDS to trigger those CDS and ask to be paid out in full."
The markets at first showed hope at the Spanish solution but dropped later. Could it not be that they opened well in the East and went down when the American and British markets opened and as mountebanks such as Fitch ,S&P etc. put the oar in and people such as them who are willing to ruin millioms of peole and many nations just for their own nefarious profit. We were shown ,by the media, that many of Britains banks are actually in technical terms ,insolvent, and yet Fitch still only' threatens'to lower Britains AAA credit rating. I know Spain has real problems of it's own making but it is one of the few countries credited with managing it's affairs within the rules of the EU.. Of course, if England and America hadn't been in at the start of the crisis with their dodgy, no lets get this right, criminal Bank scams and collapses English people wouldn't have lost their money and would have been spending it on Villas in the sun thus alleviateing Spains finances and unemplyoyment rate. No this isn't a cranky ,silly statement. It is said ,half in jest, as an image of how this is all interwoven.
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