World economy talk

[Monseratto]

Euro zone back in the news...

MADRID (AP) — Spain's latest effort to bring its public finances under control failed to reassure investors Wednesday and the country's borrowing costs rose sharply in the secondary bond markets.

In an auction of medium-term debt, its first test of investor sentiment since last Friday's €27 billion ($36 billion) deficit-reduction package, Spain only sold €2.6 billion ($3.5 billion). That was at the bottom end of the €2.5 billion to €3.5 billion target it was looking to raise from the sales of bonds that mature in 2015, 2016 and 2020.

Spain has become the latest point of concern in Europe's debt crisis, now that Greece has got its second bailout and tensions in Italy appear to have eased as new premier Mario Monti pushes through his wide-ranging austerity and reform measures. Bailed-out Portugal also appears to be faring well — its auctions of much-shorter debt earlier met with much more investor enthusiasm.

That concern was clearly evident in the markets where Spanish bonds are openly bought and sold. The yield on the country's ten-year bond spiked around 0.20 percentage point to 5.61 percent. A month ago, that rate was down below 4.9 percent.

The government also revealed Tuesday that Spain's national debt will shoot up this year from 68.5 percent of GDP to about 80 percent.

Everyone's favorite commodity...

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Spain 10 yr yield highest since December 2011

LTRO effect has disappeared

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US jobs report tonight

est. +200,000 jobs

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jobs report big miss (+120,000)

risk off

futures are open

S&P 500 e-mini futures

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we all know what happened to the US in 2007 when US property prices collapsed

the orange line is US house price index (using FNC's 20 city house price index)

the other line is Spain house price index



Spain's house prices will fall further

Spain's banks have massive exposure to developers and house buyers

eurocrisis is far from over

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wanna see how China is doing?

just look at China proxy AUD

[Monseratto]

Talk of QE3 is waning...

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risk off

[cyberian]

China is not looking good and may be in for a hard landing. China’s Gravity-defying Economy: How Hard Will It Fall? | Business | TIME.com

We have good fundamentals though but I do hope our economy is robust enough to withstand the contagion effect for something this big and closer to home.

[glenn_duke]

China is not looking good and may be in for a hard landing. China’s Gravity-defying Economy: How Hard Will It Fall? | Business | TIME.com

We have good fundamentals though but I do hope our economy is robust enough to withstand the contagion effect for something this big and closer to home.

What economic fundamentals are good that is not in any way influence by the remittances of the OFW?
If its all nested on the spending of the OFWs families then its still vulnerable especially if Eurozone goes into recession, the USA recovery continue to stall and the metal prices continue to slide.
I wonder if the UK olympics and the upcoming US election is enough to lift the world market in the second quarter.

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Talk of QE3 is waning...

for now no QE3

but there might be QE3 2H this yr

US growth stalling

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Spain 10 yr bond yield 5.93800%

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flight to safety

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Nokor rocket fail

KOSPI takes off

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Spain 10 yr yield 5.97600%

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UPDATE 2-Spanish banks' reliance on ECB hits record | Reuters

MADRID, April 13 (Reuters) - Spain's banks, virtually blocked out of wholesale credit markets, increased their reliance on cheap loans from the European Central Bank in March, borrowing almost double what they did in February.

EURO GOVT-Bank, fiscal fears drive Spanish yields, CDS higher | Reuters

LONDON, April 13 (Reuters) - Spain's government bond yields rose and the cost of insuring its debt hit an all-time high on Friday as record borrowing by its banks from the ECB underscored fears about the country's finances before it tests market appetite for its debt next week.

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Spain 10 yr yield 6.14500%

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the ECB will have to act soon

question is at what yield? 6.5%?

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market waiting for Spain's 10 yr bond auction later

yield over 6% is bad

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not bad

News Headlines

LONDON (Reuters) - Spain sold 2.54 billion euros of government bonds on Thursday in an auction that met solid demand, though with 10-year borrowing costs rising as investors worried the country may miss budget deficit targets and over the health of its banking sector.

A 10-year bond was sold at a yield of 5.743 percent compared with 5.403 percent when the paper was sold via a syndicate in February. The yield on a two-year bond dipped to 3.463 percent from 3.495 percent at a previous auction on October 6.

Demand for both bonds was higher than at their previous sales.