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§ The risk rally in currencies was only short lived yesterday afternoon. Latest developments in Spain and Greece didn't bode well for the Euro. We are back to risk off. EUR crosses and stocks are suffering across the board. USDCHF was able to hold the young uptrend and is approaching now the 200 day ma at 0.9401 again (EURUSD 1.2826).
§ Stocks; Nikkei -1.85 %, Hang Seng -0.89 %, Shanghai Composite -0.83 %, Dow Jones -0.75 %, S+P500 -1.05 %
§ Bundesbank President Jens Weidmann says if help by European Central Bank reduces pressure for politicians to push forward reforms, that could make solution of crisis more difficult, Neue Zuericher Zeitung reports, citing interview. * If ECB embarks on such terrain, it could end up becoming a prisoner of its own policies and lose credibility * Weidmann says it's ECB responsibility to preserve the euro as stable currency * He doesn't think system would have collapsed if ECB had not started its government bond program * Affected countries still capable of paying higher interest rates for some time on new issues and use the time to do what's necessary to regain investors' trust, Weidmann says * Weidmann says that while one of principles of ECB monetary policy is keeping risks as low as possible, the acquisitions take considerable risks onto Euro system's books
§ European Central Bank Executive Board member Joerg Asmussen said the ECB wouldn't be allowed to forgive Greece some of its debt as that would constitute monetary state financing, the German newspaper Die Welt reported.
§ The Spanish government will impose restrictions on schemes that make it possible for people to retire earlier than the mandated retirement age of 65 as part of a forthcoming package of reforms that seek to rein in the country's debt and revive its embattled economy, the country's prime minister Rajoy said Tuesday.
§ Spain's Andalucia seeking Eur 4.9 bn in aid, Catalonia calls for snap elections for Nov 25 (out late afternoon yesterday)
§ Spanish police fired rubber bullets as they charged crowds of protesters late Tuesday at an anti-government demonstration near parliament in central Madrid
§ WSJ: Euro-zone governments have begun discussions about creating a central budget for the currency union aimed at smoothing over some of the region's economic divergences, after Germany indicated support for the idea, European officials say. The discussions are part of a push toward a limited "fiscal union," after the economic crisis revealed fatal flaws in the setup of the common currency. (Headline was out late yesterday afternoon, but hit the wires again this morning)
§ Greeks opposed to more wage cuts and austerity are staging a general strike today that will be the first test of the public mood toward budget measures Prime Minister Antonis Samaras said are vital to keep the euro.
§ Europe's debt crisis remains the biggest drag on the global economy, but the region is in a much better situation today than it was, U.S. Treasury Secretary Timothy Geithner said on Tuesday. "For the first time they have in place a plausibly powerful set of financial tools to support a strategy," Geithner said.
§ Federal Reserve Bank of Philadelphia President Charles Plosser said new bond buying announced by the Fed this month probably won't boost growth or hiring and may jeopardize the central bank's credibility.
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