Fundamental and technical analysis are no longer the only tools needed for maneuvering thru markets. We must now be skilled in newswire analysis as any comment from a politician or central banker keeps driving market moves. ECB head Draghi said they “will continue lending to solvent banks and will keep the liquidity lines active and alive with solvent banks” but said they won’t fill the fiscal holes left by individual governments. Monti and Italy’s ECB member pressured Germany to allow the ESM (whenever its up and running) to inject capital directly into banks. The EC’s Olli Rehn spoke too and “urges roadmap toward joint euro bond issuance.” From a market perspective with the noose tightening further around Spanish banks and ahead of the Greek election, the question is what the pain threshold is before we get more central bank action as money printing is more politically expedient as it unfortunately was for us.
Data wise in Asia, India’s Q1 GDP rose only 5.3%, Hong Kong retail sales in Apr rose much less than expected and Japan’s IP was light. In the Euro zone, CPI rose 2.4% y/o/y, the slowest since Feb ’11. In Germany, the number of unemployed remained flat but the rate fell to 6.7%, a reunification low. Retail sales in Germany and France in April were above estimates.