The only thing that matters over the next 2 weeks is whether the growing discontent pushes G-Pap into a chopper; if not, we'll have a solution for the next month or two (loan disbursement), until the 2nd bailout is debated up to the last minute (on whether there will be a restructuring, or a "voluntary" exchange). Even though the new austerity measures being pushed through in Greece's Parliament are less than the troika's expectations, I think they will give Greece the money unless the Confidence Vote fails or the austerity measures are rejected. I see a 50/50 chance the strikes/protests scheduled for this week will have some impact. The Greek people don't seem as willing to lube themselves up as the Irish or Portuguese.
Loan delinquencies rose in Spain over Q1. Also of note is the rising Spanish 10-year and CDS, which have finally broken out above their range held for the last few months. Whether this continues near-term all depends on - you guessed it - the Greek protestors.
As for Tuesday's FOMC announcement, I expect the same language as last month, possibly mentioning providing ample liquidity if the Euro situation deteriorates, but recognizing that while economic indicators are currently pointing down, it's transitory, while inflation measures are pointing up. I.e., I expect them to maintain QE lite and not mention any new QE/Operation Twist program.
One more thing to note: I haven't fully researched it, but reports (here and here) indicate the Dodd-Frank Act's requirements, which are to be implemented 180 days from enactment (i.e., in the next month or so), have:
1) raised the "accredited investor" requirements;
2) restricted/eliminated who (now only traders registered with CFTC) can trade spot futures contracts (e.g., PMs, forex), or who can trade on margin any commodity futures contract;
3) changed the definition of what constitutes a "retail" fund
My first thought is that this could dry up alot of liquidity in those markets; my second thought is that alot of hedge funds might have to partially unwind their positions to exiting clients that are no longer accredited (unless there's an exemption for already-placed investors).
Loan delinquencies rose in Spain over Q1. Also of note is the rising Spanish 10-year and CDS, which have finally broken out above their range held for the last few months. Whether this continues near-term all depends on - you guessed it - the Greek protestors.
As for Tuesday's FOMC announcement, I expect the same language as last month, possibly mentioning providing ample liquidity if the Euro situation deteriorates, but recognizing that while economic indicators are currently pointing down, it's transitory, while inflation measures are pointing up. I.e., I expect them to maintain QE lite and not mention any new QE/Operation Twist program.
One more thing to note: I haven't fully researched it, but reports (here and here) indicate the Dodd-Frank Act's requirements, which are to be implemented 180 days from enactment (i.e., in the next month or so), have:
1) raised the "accredited investor" requirements;
2) restricted/eliminated who (now only traders registered with CFTC) can trade spot futures contracts (e.g., PMs, forex), or who can trade on margin any commodity futures contract;
3) changed the definition of what constitutes a "retail" fund
My first thought is that this could dry up alot of liquidity in those markets; my second thought is that alot of hedge funds might have to partially unwind their positions to exiting clients that are no longer accredited (unless there's an exemption for already-placed investors).
