We saw Dutch Industrial Production miss, Italy miss even worse, and the UK which was an all out collapse with the largest 1 month decline since November of 2008, but get this, BETTER THAN CONSENSUS !!!
June Industrial Production, which was much worse than expected, can only be called, "DISAPPOINTING."
Next German Factory Orders plunged from +0.7 to -1.7 on consensus of -0.8.
Considering several of those countries are still Aaa rated, this might be what we would call, "Contagion of the core", this is what the EU has been trying to avoid for years now with bailouts and mechanisms and as our favorite EU official would say, "When things get serious, you have to lie", so lies as well.
The Italian Q2 GDP was a disappointment as Italy is CLEARLY in recession. The year on year contraction now stands at -2.5%!
In Spain, perhaps the final domino in the fall of the EU, Mariano Rajoy’s confidence and popularity in a poll of voters has eroded to just above 22% support and as they pointed out yesterday, they haven't even officially asked for a bailout yet! Wait until they do and the Trokia makes their economy and unemployment twice as bad as it is now. It's worth noting that Rajoy won in a landslide victory only last November, how quickly they fall.
However, despite all of this, most of Europe has been trading fairly well except the FTSE 100 which is suffering because of the Standard Chartered (down -23% as they broke US trade sanctions) Iranian scandal. Also, surprisingly Italian 10 year benchmark yields have fallen below the key 6% level. The Spanish short end which started to outperform after Draghi's, "Anything it takes to save the Euro" (as well as any bond buying from the ECB would be in the short end or the useless end) comments, is now turning and underperforming. The Spanish 10-year has managed to stay under the 7% level. Basically the market is still benefitting from Draghi comments, but is yet to discount his inaction at the ECB meeting last week, in my opinion this is more tactical set up than anything else as we saw a number of averages and key momentum stocks slip above key resistance levels where buyers would step in, giving Wall Street and the rest of smart money enough demand to sell in to or short in to.
On Central bank action, the AUD/USD saw some strength overnight as the Reserve Bank of Australia left rates unchanged at 3.5%.
There's not much key data coming out of the US today so I'm not sure we'll see anything market moving, Bernie is speaking, but it's more of an educational lecture, I doubt policy comes up. We do have US Consumer Credit at 3 p.m. EDT today.
Here's the EUR/USD
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