As to the EU summit fade, promising a unconditional bailout of Spain and Italy is one thing, delivering it is quite another as we have seen with all EU grand schemes, just think back to the ultra-leveraging of the EFSF, the EU decided to leverage the temporary bailout mechanism to over a trillion dollars, the only problem was there was no money and no one willing to put the money in to the fund.
As to last weekend's promise, Holland and Finland (2 of only 4 EU-zone member states that still have a AAA credit rating) apparently wish to keep their triple A credit rating and as such have pretty much scuttled the promises of last week's EU summit, Germany has participated as well, virtually stripping away the language from the summit that would strip the ESM of its seniority status as it pertains to debt and as a result, Merkel has seen the highest German approval ratings since 2009.
The Spanish 10 year which dropped to 6.2% after the summit is now back in the 7% area as all of the post EU summit rally fades away.
Overnight, after seeing the temperament of the paymasters, Greece has revoked its demands to ease bailout terms, it has been made clear to them that it is not happening. This may cause a lack of confidence in the new government that campaigned on promises to renegotiate the terms of their bailout.
The IMF said they will be lowering world growth estimates overnight.
The German Finance Minister said no action can be taken on the Spanish banking bailout front as there is not a complete Troika report yet (more conditions added since the bailout was announced about 3 weeks ago). He also said the bailout mechanism that was supposed to come online July 9th will likely be delayed until July 20th, which means it will probably be delayed well in to August.
The market tone in Europe is one of overall disappointment as the Central Bank decisions yesterday came in as expected, there's disappointment that more was not done on the easing front.
Finally one piece of good news, German Industrial production for May did beat, however that is like an island in a sea of misses this week.
As to the US, as usual, yesterday's ADP report signaling an improving labor environment ahead of the Non-Farm Payrolls this morning, was shown to be what it truly is (AGAIN), a noisy data point that has little relevance to real world data.
As the world awaited the US NFP this morning, the tension was palpable as ES volumes dropped to about half the normal volume.
Non-Farm Payrolls came in at a miss
Released On 7/6/2012 8:30:00 AM For Jun, 2012
| Prior | Consensus | Consensus Range | Actual | |
| Nonfarm Payrolls - M/M change | 69,000 | 90,000 | 35,000 to 167,000 | 80,000 |
| Unemployment Rate - Level | 8.2 % | 8.2 % | 8.1 % to 8.3 % | 8.2 % |
| Average Hourly Earnings - M/M change | 0.1 % | 0.2 % | 0.1 % to 0.2 % | 0.3 % |
| Av Workweek - All Employees | 34.4 hrs | 34.4 hrs | 34.4 hrs to 34.5 hrs | 34.5 hrs |
| Private Payrolls - M/M change | 82,000 | 100,000 | 45,000 to 176,000 | 84,000 |
The print of 80k was below street consensus of 100k; private payrolls came in at 84k below street consensus of 106k. While the U3 unemployment rate remained at 8.2%, the broader measure, U6 (the same way unemployment was measured during the Great Depression) rose from 14.8% to 14.9%.
ES is off about 13 points since yesterday's NY close, the Euro is on the back-foot.
Since NFP...
Multiple Market Updates on the way
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