ZuluTrade Blog

Big risk rally after Spain asked the EU for help to support their banking system

Market View | Monday, June 11, 2012 3:47 AM GMT

Good Morning ,

- Big risk rally after Spain asked the EU for help to support their banking
system. EURUSD rallied in Asia to 1.2672, while the EMG- and commodity
block did also better against the USD.

- Stocks: Nikkei +2.09 %, Hang Seng +2.27 %, Shanghai Composite
Dow Jones +0.75 %, S+P500 +0.81 %

- Euro zone finance ministers agreed on Saturday to lend Spain up to 100
billion euros to shore up its teetering banks and Madrid said it would
specify precisely how much it needs once independent audits report in just
over a week.

- German Finance Minister Wolfgang Schaeuble said European bailout aid to Spain
will be directed exclusively to the banks and compared the recapitalization
plan to the U.S. response to the financial crisis. "This is about Spanish
banks, it's not about Spanish finance policy or Spain in general," Schaeuble
told Deutschlandfunk radio in an interview today from Berlin.

- ECB Weidmann said that Spain should go further in pursuing structural reforms
in its economy after receiving aid to recapitalize its banks. "I have trust
in the Spanish government, in that they've already undertaken comprehensive
reforms in the labor market," Weidmann said. "But they must indeed go further
along this path."

- IMF Lagarde said the 100 billion-euro of emergency loans that euro-area
countries offered to Spain to shore up its banks is "consistent" with the
capital needs identified by the fund. The scale of the package "gives
assurance that the financing needs of Spain's banking system will be fully
met," Lagarde said. "The IMF stands ready, at the invitation of the Eurogroup
members, to support the implementation and monitoring of this financial
assistance through regular reporting," she said in the statement.

- French President Francois Hollande's Socialist Party is set to win the
largest number of seats in parliament, exit polls for the first round of the
country's legislative elections yesterday showed. Hollande will have to wait
until the June 17 second round to know if he has an absolute majority or will
need allies in parliament. In yesterday's round, the Socialist Party and its
Green and Left Front allies took 47.1 percent of the popular vote. Former
President Nicolas Sarkozy's Union for a Popular Movement and its allies got
35.4 percent.

- Standard & Poor's Ratings Services Friday affirmed its AA+ long-term
sovereign credit ratings on the United States of America, but maintained its
negative outlook due to political and fiscal risks.

- WSJ: Moody's Investors Service has said it is likely to reduce by the end of
June credit ratings for 17 large global banks, including five of the six
biggest U.S. financial firms by assets (J.P. Morgan Chase & Co., Bank of
America Corp., Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley.)

- China's consumer prices rose the least in two years in May and industrial
output and retail sales trailed estimates and on Sunday China's exports grew
in May at more than double the pace analysts.

- China Data Recap                  Period    Survey      Actual      Prior
* CPI yoy                                 May       3.2 %      3.0 %      3.4 %
* Industrial Production yoy         May       9.8 %       9.6 %      9.3 %
* Retail Sales yoy                     May      14.2 %     13.8 %    14.1 %
* Exports yoy                           May        7.1 %    15.3 %     4.9 %
* Imports yoy                          May        5.5 %    12.7 %     0.3 %
* Trade Balance (USD)              May       16.25b    18.70b    18.43b

- Japan Data Recap                      Period     Survey     Actual       Prior
* BSI Large All Industry qoq           Q2             -         -3.1 %    -2.7 %
* BSI Large Manufacturing qoq       Q2             -          -5.7 %    -7.3 %
* Consumer Confidence                May          39.8         40.7        40.0

- New Zealand Data Recap                Period     Survey      Actual      Prior
* Manufacturing Activity                      Q1             -       -1.8 %      0.9 % rev

- Australian treasurer comments in weekly economic note:
* "Falling interest rates, strong growth and low unemployment is a great
trifecta"
* RBA's latest rate cut is a "win for millions of households and small
businesses"
* "We've got rising incomes, contained inflation, broad-based consumption
growth, a healthy rate of household savings, public finances in great nick,
and a budget returning to surplus," he says. "Certainly our nation has its
challenges, but Australians can deservedly be proud of the strong economy
their hard work, determination and resilience have helped create."

- Eighty percent of U.K. citizens think there should be a referendum on the
country's relationship with the European Union, a Populus poll carried out
for the London-based Times indicated. Asked whether Britain should stay in
the EU, 36 percent said "Yes," 44 percent "No" and 19 percent had no opinion,
the Times said.

- IMM Positions: EUR -214k vs -203k, JPY 12k vs -11k, GBP -3k vs 2k, CHF -34k
vs -31k, CAD 15k vs 34k, AUD -51k vs -35k, NZD -5k vs -2k

- no major US Data
- 1800 Fed Lockhart
- 1800 Fed Williams
- 0845 France Industrial Production Apr
- 0845 France Manufacturing Production Apr
- 1000 Italy GDP Q1 F
- 1530 ECB announces bond purchases
- 1615 BOE Posen

   (CET)

Have a good start !

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