ECB/Spain/Hungary/what else is new

After reaching almost $1.31, the euro rolled over at around 3am after the ECB said 453.2b euros were deposited with it overnight, up 7b from yesterday and that is a record amount. Also around that time a Spanish newspaper reported that Spain is seeking IMF and EFSF loans to help them recap their banks. Spanish bonds are trading lower on the story even though it was denied by the Spanish gov’t at around 7am. Of issue too this morning on the outskirts of the euro zone is Hungary as the cost of insuring against default is rising to a record high and yields are jumping over concerns that Hungary will fail to come to an agreement with the IMF on needed loans. Euro zone CPI did moderate to 2.8% y/o/y as expected after 3 months in a row of 3% prints. Euro zone services and mfr’g composite index was revised to a slightly better than expected level. In Asia, the Shanghai index, on its 1st trading day of the year, gave back its 3 previous days gains. India’s services PMI did rise 1 pt to a 5 month high. In the US, mortgage rates fell to another record low of 4.07% on avg but refi’s fell 2.5% and purchase apps were down by 9.6%.

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