UK CPI missed by a smidge, but dropped sequentially from 3.5 to 3.0 (consensus 3.1), that caused some overnight selling in the Sterling.
Greece is to receive $18bn to go toward recapitalizing their banks which have seen massive, sustained bank runs. There was some rally on that news, but ultimately everything flattened out as this is not new news, it's part of a scheduled release, whether the Greeks actually use the money where it was meant to go is another story entirely.
As mentioned Sunday about headlines, etc, The Euro-summit looks to be a bomb for the exact reasons mentioned Sunday, France who has shifted away from the German-Franco alliance and more toward a PIIGS alliance supports Euro-Bonds, Germany never has. From Reuters:
"Germany does not believe that jointly issued euro zone bonds offer a solution to the bloc's debt crisis and will not change its stance despite calls from France and other countries to consider such a step, a senior German official said on Tuesday. "That's a firm conviction which will not change in June," the official said at a German government briefing before an informal summit of EU leaders on Wednesday. The official, requesting anonymity, also said he saw no need for leaders to discuss a loosening of deficit goals for struggling euro zone countries like Greece or Spain, nor to explore new ways for recapitalise vulnerable banks at Wednesday's meeting."
The FT and Bloomberg carried the headlines that size up the Euro-Summit, "France to push for Euro Bonds" and "Merkel says she won't shy away from a clash with Hollande at the Euro Summit"
So nothing new or unexpected, go about your business, nothing to see here except the formerly slow motion train wreck that is Europe gaining speed.
In Switzerland the parliament will discuss the issuance of a Gold Franc, which is ironic as I was just talking to a member a few days ago about this very scenario, not sure of who the country would be, but that at some point someone who is big enough will challenge the $USD reserve currency status with a gold backed currency.
Those are the overnight headlines, the EUR/USD and ES action looked like this...
So with the Euro dropping, all in all ES held up pretty well, but I wouldn't be surprised to see the market pullback a bit toward the correlation in which thus far ES has held above.
As an item of simple curiousity, the FB sell-off continues and in the headlines the finger pointing has begun, of course most fingers pointed at MS, again I suspect they made a business decision in seeing the book order flow and decided not to let th profits of the IPO be wasted trying to defend FB against a flood of sell orders.
In the US we have Existing Home Sales which were soft...
Released On 5/22/2012 10:00:00 AM For Apr, 2012
| Prior | Consensus | Consensus Range | Actual | |
| Existing Home Sales - Level - SAAR | 4.48 M | 4.660 M | 4.500 M to 4.850 M | 4.62 M |
| Existing Home Sales - M/M Change | -2.6 % | 3.4 % |
Missing consensus by a bit, most of the weakness was in the revised March number at 4.48m units, down from 4.6 mn units.
The Richmond F_E_D Manufacturing Index was also a disappointment just minutes ago...
| Prior | Consensus | Consensus Range | Actual | |
| level change | 14 | 11 | 3 to 15 | 4 |
Coming in at 4 on lower consensus of 11 and prior of 14. This manufacturing index is of significant importance since last Thursday’s Philly Fed survey had shown a contraction by -5.8 in May (consensus of 10, from previous 8.5). This means there are growing reasons for concern regarding the manufacturing side of the US economy.
Thus far the market is taking it in stride, can you guess why? I'll address that in the next post, but I think you have an idea.
That's about it for US data except for a 4 week bill auction and a 2 year note auction
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