Succinct summation of week’s events:
Positives:
1) Spanish bond yields fall about 50 bps across their curve. Italian yields lower but not as much. Will the EFSF and then the ESM buy sovereign bonds? Portuguese 10 yr yield falls 100 bps and 2 yr down 188 bps on the week
2) June Euro region mfr’g and services composite index unchanged at 46, well below 50 and points to clear slowing but was a touch better than expected
3) Lack of a negative rather than a positive but Syriza loses in Greece
4) NAHB home builder survey hangs at 5 yr high at 29 but remains still well below breakeven of 50
5 From construction standpoint, housing permits rise to most since Sept ’08.
Negatives:
1) German IFO business confidence falls to lowest since Mar ’10 in June
2) German ZEW investor confidence in their economy shows biggest one month drop since Russian debt mess in Oct ’98
3) German mfr’g PMI falls to lowest since June ’09
4) French business confidence falls to lowest since Mar ’10
5) Italian consumer confidence drops to record low (dating back to ’96)
6) Switzerland and Denmark both sell short term debt with negative yields, great for them, sign of panic and fear on the part of the buyers
7) HSBC preliminary June Chinese mfr’g falls to 48.1 from 48.4, a 7 month low
8) India’s struggle with inflation prevents RBI from cutting rates to help slowing economy
9) Philly mfr’g falls to -16.6 from -5.8, well below est of zero and follows weakness in NY region
10) Initial Claims at 387k, 4th week in a row 380k+ and 4 week avg rises to highest of the yr
11) May Existing Home Sales total 4.55mm annualized, a touch light and months supply moves to most since Nov ’11
12) FOMC just can’t say no. Bullard says it best today on OT, “The committee has kind of been haunted by having end dates on programs and it seems like the end dates never occur at the right moment.”
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