Debt Swap And The Ecb's

Euro hits fresh 2012 lows ahead of informal summit; More reports of an ECB contingency plan in the works Economic Data (GR) Greece Mar Current Account: -€2.1B v €1.1B prior (NL) Netherlands Mar Consumer Spending Y/Y: % v -1.3% prior (SE) Sweden Apr Unemployment Rate: % v 7.8%e (EU) Euro Zone Apr Current Account: +€7.5B v -€5.6B prior; Current Account Seasonally Adj: +€7.5B v -€1.2B prior (IT) Italy May Consumer Confidence: 86.5 v 89.5e (lowest reading on record after series began in 1996)) (ZA) South Africa Apr CPI (all items) M/M: 0.4% v 0.5%e; Y/Y: % v 6.2%e (TW) Taiwan Apr Industrial Production Y/Y: -2.3% v -1.7%e; Commercial Sales Y/Y: -2.4% v -0.9% prior (UK) Apr Retail Sales Ex Auto Fuel M/M: -1.0% v -0.7%e; Y/Y: -0.3% v +0.7%e (UK) Apr Retail Sales with Auto Fuel M/M: -0.8% ...

(Reuters) - The Federal Reserve's outstanding central bank liquidity swaps program has shrunk to its lowest level since early December, but if conditions in European unsecured bank funding markets deteriorate, demand for those swaps could rise. According to the Fed's latest balance sheet update, outstanding dollar liquidity swaps fell to $32 billion in the week ended Wednesday. But money market players are preparing for a new round of financial stress as concern over euro zone banks' exposure to Spanish and Italian government debt grows and borrowing costs for the two countries rise. If conditions in European unsecured bank funding markets deteriorate as a result, demand for the Fed's dollar liquidity swaps may rise, said Barclays Capital market analyst Joseph Abate. Data released ...

(Reuters) - Spain's banks are fast joining the ranks of the most unloved in Europe just as many need to raise capital urgently, deserted by investors who believe the country is on the brink of a recession that many lenders will not survive. The government has ruled out more state aid for a sector that comprises a motley mix of international lenders and heavily indebted local savings banks. That leaves two options: raising private capital or turning to the EU for bailout funds. Prospects for a private sector solution are poor. Nothing on the horizon looks likely to persuade foreign fund managers to invest, such is the fear of the banks' growing bad loans, their holdings of shaky sovereign debt and the worsening economy. Already battered by a property market crash that began four years ...

Weekly Economic and Financial Commentary U.S. Review Housing Indicators Pulled Back, but Don't Be Alarmed This week, the economic calendar was chock-full of housing market data. While housing indicators painted somewhat of a mixed picture, with nearly all housing market indicators unexpectedly declining on the month, we continue to see real improvement. That said, much of the pullback was due to the mild winter, which likely exacerbated the seasonal adjustment process. Housing starts unexpectedly fell 1.1 percent to a 698,000-unit pace in February. January starts, however, were upwardly revised to a 706,000-unit pace, the highest level since October 2008. Housing Indicators Pulled back, but Don't Be Alarmed This week the economic calendar was chock-full of housing market data. ...

Forex News and Events: Risk appetite crept back in the FX markets slowly but directional price action lacked the conviction for us to reverse our overarching bearish view. This morning traders have been focused on USDJPY with the pair comfortably above the 82.00 handle. At the BoJ policy meeting the central bank held rates at zero to 0.1% and did not increase Asset Purchase Program above the Y10 trn. The lack of action disappointed some lawmakers and international investors who were hoping for additional stimulus. The BoJ did opt for an expansion of a loan scheme, targeting growth industries by 2 trillion yen to 5.5 trillion yen. Ryuzo Miyao, the know pessimist on the board, proposed to increase the asset buying and loan scheme (proposed Y5trn additional expansion). News flow and ...

The Week Ahead Highlights What now for the euro? To hike or to cut? A global central banker's dilemma Why the rise in oil prices should grab our attention What now for the euro? The debt deal agreed by Greece and its private sector bond holders to wipe EUR 100 billion from its enormous debt pile was an historic move: the largest sovereign debt restructuring in history. This is the latest piece of the jigsaw to try and solve the sovereign debt crisis, but the market's response suggests that the saga does not end here. Not only did Fitch place Greece into selective default after Collective Action Clauses or CACs were introduced to force reluctant bond holders to accept losses, but as Europe closed on Friday night expectations were growing that Credit Default Swaps on Greek ...

The Weekly Bottom Line HIGHLIGHTS OF THE WEEK United States Stocks experienced a modest bout of volatility this week. The S&P500 declined 1.5% on Tuesday (the largest daily decline of 2012) only to rally and recoup the losses by the end of the week. Another important step was taken in the euro-zone this week when a Greek debt swap that will reduce the nation's debt burden by €100 billion received sufficient participation. While recent progress in the euro-zone is encouraging, Greece may still have to write down more debt in the future. Finally, the U.S. job market continues to hold its momentum. 227K new jobs were created in February, marking the third straight month of 200K+ job creation. Canada Canada shed 2,800 jobs in February, entirely erasing January's gain. ...

The euro rose against the U.S. dollar and yen on Thursday after Greece's bond swap deal closed with enough participation for the debt deal to go through, allowing Greece to avoid a disorderly default. Greece officials reported very high levels of take-up by private creditors for the deal. One senior Greek government official said that take-up had neared 95 percent before the expiration of the deadline at 3 p.m (2000 GMT). "There was the expectation that it would get done but now there is maybe a sigh of relief in the market that it is getting done with less messiness, and that is helping risk sentiment," said Brian Kim, currency strategist with the Royal Bank of Scotland in Stamford, Connecticut. Athens had said it would need at least a 75 percent participation rate for the deal to go ...

(Reuters) - Greece's tortuous debt restructuring and threat of retroactive laws to compel reluctant creditors heaps regulatory risk onto investors but may make voluntary sovereign debt revamps more attractive and likely for other cash-strapped euro sovereigns and their creditors. Thursday could mark a climax of the Greek debt workout with private creditors due to respond to an offer that would see them effectively write off more than 70 percent of the face value of their bonds in return for new debt with a series of sweeteners. With Greek government bonds currently trading at less than 20 cents in the euro and the risk of a total wipeout if Greece decided to unilaterally refuse all payments, a majority will likely go for it. Legally-binding majorities are another matter. Athens said ...