5th Jul - US Close: QE expectations?

So now everyone is waiting the US payrolls - if they are bad, the chance of further action from FED is increased. The European peripherial bond yields have continued their march upwards and are near the pre-summit levels. Something stronger than a single page of promises to be fulfilled in six months is soon needed.  I’m posting a bit early today, but will update the missing regulars later.

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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

  Equities Fumble As Broke Banks Mounting

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

EURO CRISIS

And Then There Were Six – Is Slovenia Next? – A Fistful of Euros

Thus while it is not true to say that the country is shut out of the markets, it is now a very close thing. My bet is we will see some sort of rescue in the near future, but as we have seen in Spain moving from rescue to getting credit flowing and getting back to sustainable growth looks set to be a very hard road.

Euro break-up: Let Germany lead the northern core and France the rest – The Telegraph

The respected economist and Telegraph columnist summarises the argument for an orderly break-up of the eurozone if a struggling member was forced to leave that won him the Wolfson Economics prize.

The creation of euro area safety nets – bruegel

The euro area has developed several such mechanisms over the last couple of years through a process of trial and error and gradual enhancement and expansion. Their overall architecture remains imperfect and leaves areas of vulnerabilities.

Organising bank supervision and resolution in Europe – bruegel

Two issues on the road to a banking union will prove particularly contentious: the organisation of common financial supervision, which is an explicit part of the summit agreement and the creation of a resolution authority, which is not really covered in the summit statement. The fact that the summit document is silent on resolution shows how contentious the issue is.

Inching towards integration – The Economist

The latest European summit made more progress than usual—but still not enough

EURO CRISIS: ECB

Draghi delivers his third rate cut – Danske Bank (pdf)

Draghi: ECB needs more democratic accountability – euobserver

Mario Draghi spoils the euro party – Wonkblog / WP

ECB rate cut impact will be marginal at best – Sober Look

Also The Telegraph, WSJ, BBC, alphaville / FT

ECB Margin Calls Surge And Basis-Swaps Plunge – ZH

…without the ECB reducing its margin rules dramatically (which would be a NEIN from the Germans), we appear to have hit the limit on asset values for collateral. This is yet another unintended consequence of the LTROs…

Spot The Odd One Out – ZH

The post-EU-Summit exuberance has entirely worn off in everything that mattered to the EU-Summit 'bulls' as EURUSD and both Italian and Spanish bond spreads are now back wider than pre-Summit.

CHINA

Why China Can’t Adjust – Project Syndicate

China - PBoC cuts rates for the second time in less than a month – Danske Bank (pdf)

OTHER

PMIs continue to weaken as the global economy slows – Danske Bank (pdf)

Pariah profits in an age of ‘negative carry’ – alphaville / FT

why the banking system’s biggest problem may lie in ‘negative carry’ — a phenomenon that would make investment-focused lending unprofitable,

EMEA Weekly, Week 28 – Danske Bank (pdf)

Fed QE3 is moving closer – Danske Bank (pdf)