Recap 6-26-12

Main Items:

  • Last night, Moody’s downgraded 28 Spanish banks by 1 to 4 notches. There are now 21 Spanish banks rated "junk."
  • In parliamentary testimony, BoE chairman King said the he thought we were “not yet half way” through the crisis, which suggests a recovery time of at least another 5 years. Also, a couple MPC members testified that they were unsure whether a Bank Rate cut was positive because of the effect on lenders’ margins.
  • Japan’s Lower House passed the bill to hike the VAT tax rate today as expected. Since the Upper House is expected to pass the bill in early-August, Japanese consumption tax rate will be hiked to 8% from the current 5% in April 2014 and to 10% in October 2015
  • Merkel reported said that Europe will not have shared total liability for debt as long as she lives. Separately, Merkel remains the most popular national politician in Germany.
  • US Consumer Confidence declined to 62 in June vs 63 exp and 64.9 prev
  • Richmond Fed declined to -3 in June vs 2 exp and 4 prev


  • German GfK Consumer Confidence improved to 5.8 in July vs 5.6 exp and 5.7 prev
  • France Consumer Confidence was stable at 90 vs 89 exp
  • Italian Hourly Wages rose 1.4% YoY in through May

Upcoming Data:

  • Tues: South Korea Business Survey
  • Wed: German CPI, US DGO, Pending Home Sales, Japan PMI
  • Thurs: EU Summit, German Unemployment, US Initial Jobless Claims, UK Consumer Confidence, Japan CPI
  • Fri: EU Summit, EU Money Supply, CPI Estimate, CanadaGDP, US Personal Spending, PCE Deflator, Chicago PMI, UMichigan Confidence

Commentary & Links:

chart from the Economist is interesting: (h/t Riholtz)