Le Monde
ECB PREPARING TO BUY SPANISH, ITALIAN DEBT, LE MONDE SAYS
More from Reuters:
"Euro zone governments and the European Central Bank are preparing to intervene on financial markets to help bring down Spanish and Italian borrowing costs, French afternoon daily Le Monde reported on Friday.
The newspaper, which cited unnamed sources, said the ECB was willing to take part in the action on condition that governments agreed to tap the bloc's bailout funds, the European Financial Stability Facility and the European Stability Mechanism.
Under the plan, the EFSF could be activated first to purchase Spanish and Italian debt on the primary market, followed by the ESM in September, after it becomes operational.
The ECB would at the same time buy Spanish and Italian government bonds itself on the secondary market.
The newspaper said the plan was days or possibly weeks away from being finalised and that officials were holding consultations on Friday about it."
ES overnight with the European opening at the green arrow for a 9 point move up from yesterday's close...
ES to present open
However, as usual, one hand in the EU doesn't know or agree with what the other hand is doing, EVEN IN THE SAME COUNTRY-GERMANY! (you'll understand why in a minute)...
From the WSJ:
"Germany's central bank remains opposed to further government bond purchases by the European Central Bank, but isn't against using the euro-zone's temporary rescue fund (European Financial Stability Facility) doing so to drive down soaring sovereign borrowing costs, a Bundesbank spokesman said Friday.
Germany's central bank regards further bond buys by the ECB as "problematic" and "not the most sensible" instrument for overcoming the debt crisis, in particular because they create false incentives for governments, the spokesman said."
So it seemed/seems like the ECB jawboning was exactly that, or was it?
From Bloomberg:
Draghi Boxes Himself Into A Corner With Bond Signal: Euro Credit
Spanish and Italian bond markets rallied yesterday as investors cheered Draghi’s signal that the ECB is prepared to intervene to reduce soaring yields. Now he has to deliver, or face deep disappointment on financial markets, analysts said. The risk in doing so is alienating key policy makers on the ECB council, such as Bundesbank President Jens Weidmann. The Bundesbank reiterated its opposition to bond purchases today.So perhaps his reputation and credibility are at stake, maybe he does have to deliver. It seems Germany is opposed, at least that's the German Central Bank's position.
But Wait-Stop the presses!!!
*MERKEL, HOLLANDE READY TO DO ANYTHING TO PROTECT EURO REGION
A new alliance between Germany or at least Merkel and France, but the German Central bank?
So at this point, there has been so much talk from so many people that the participants that are supposed to be working together don't even seem to agree and nowhere is this more clear than in the very efficient and effective country of Germany itself where the Chancellor seems to be contradicting the German Central bank!
Lets try something less confusing...
In the US...
US Q2 GDP was released pre-market and beat expectations of 1.4 coming in at 1.5, a drop from the Q1 print of 2.0
| Prior | Consensus | Consensus Range | Actual | |
| Real GDP - Q/Q change - SAAR | 1.9 % | 1.2 % | 0.9 % to 2.4 % | 1.5 % |
| GDP price index - Q/Q change - SAAR | 2.0 % | 1.6 % | 1.2 % to 2.2 % | 1.6 % |
There were also BEA retro-active GDP revisions, for instance 2010 GDP was revised from 3.0 to 2.4, Q3 2011 was revised higher from 3.0 to 4.1.
The only real question is, "How does this effect the chance for QE3 ?"
Thus far, this is our best answer, it seems for now, the print wasn't quite bad enough to be considered good news.
GLD's reaction this morning...
Market updates on the way...
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