If that fails to get your interest, then how about this chart of accumulation yesterday at the lows (one of the reasons we started picking up spec leveraged longs yesterday before the move higher)?
The next rumor is coming from the German press, "The Greek EU exit is a done deal". Of course there were counter-stories such as "EU urges Greece to stay in EU", even "F_E_D's Bullard says an orderly Greek exit possible", the typical EU sewing circle.
Overnight HSBC's Flash PMI for China (which has been divergent with Chinese Flash PMI for several months), fell from 49.3 to 48.7 month over month (anything below 50 is considered contraction). This makes 7 consecutive months of contraction in the HSBC Chinese Flash PMI and 10 of 11 months in contraction.
From there on to Spain and this Reuters report... (Remember about a month ago we posted several countries in which their debt to GDP was much higher than the official EU numbers? Well, Spain was one of them and the truth is seeping out.)
"Top Spanish officials are at odds over how to help the country's highly indebted regions refinance 36 billion euros of debt this year, government sources told Reuters on Wednesday.
The figure, revealed in the budget plans from 17 autonomous communities, compares with previous public data of around 8 billion euros of bonds maturing in 2012.
The difference is due to bilateral loans from Spanish banks to the regions worth 28 billion euros that were not made public previously. It could unnerve further investors concerned by the capacity of Spain to curb its public finances and reform its banking sector."
Yes, $28 bn Euros more and they haven't even finished counting contingent liabilities, expect more of the same and the number to grow even larger.
This morning out of Europe we also saw some pretty horrible Manufacturing and Services PMI. The consolidated Euro-zone PMI was the weakest since 2009. The UK also came in with weaker Q/Q and Y/Y GDP data. The German IFO Business Climate report also came in weaker than expected. However we are in the season of bad news is good news and it can be summed up in one headline, "ECB's Nowotny says the full ECB arsenal has not yet been utilised."
In the US this morning, we had Initial Claims...
Released On 5/24/2012 8:30:00 AM For wk5/19, 2012
| Prior | Consensus | Consensus Range | Actual | |
| New Claims - Level | 370 K | 371 K | 361 K to 378 K | 370 K |
| 4-week Moving Average - Level | 375.00 K | 370.00 K | ||
| New Claims - Change | 0 K | -2 K |
Claims came pretty close to consensus, but once again as has been the trend, the previous was revised from 370k to 372k so as usual the media will report a decline in IC, even though EVERY week they do the same thing, Claims miss? They revise the prior week higher and call it a beat.
JPM followed GS's and Papademos this morning with their opinion that the ECB will conduct a 1 year LTO in July-remember, bad news is good news and the Euro on that report?
And the latest rumor (not out of the EU, but about it), from the Bank of Russia (?)
- GREECE HAS PLAN FOR PARALLEL CURRENCY, SHVETSOV SAYS
- RUSSIA'S SHVETSOV SAYS `NECESSITY' FOR GREECE TO LEAVE EURO
- SHVETSOV SAYS GREEK EXIT WOULD BE GOOD EXAMPLE FOR OTHERS
- BANK OF RUSSIA’S SERGEY SHVETSOV SPEAKS IN INTERVIEW IN MILAN
The sewing circle just increased in size by a continent!
As for the Euro and ES, ES held up pretty well over night, there was some volatility, but lets take a look since the open.
The CONTEXT model is showing ES over-valued right now, I'll be checking our own indicators shortly after a market update.
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