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Traders look for clarity on the potential bailout for Spain...

Tuesday, October 16, 2012 3:44 AM GMT

 Good Morning,


-Global stocks rose on Monday on upbeat U.S. data and earnings and on bets Spain was close to asking for a bailout, but the lack of details on Madrid's next move kept the euro flat.

- Also, data from China over the weekend showing a much higher-than-expected rate of growth in exports offered support to risk markets.

- Furthermore, US stocks boosted by strong Citi earnings. Citigroup posted better-than-expected earnings and rallied 5.5 percent to close at $36.66, the highest in more than six months.

-Despiteencouraging U.S. retail sales, Citigroup results EUR/USD hold above 1.29 but Remains in Congestion Focused on 1.30, as traders look for clarity on the potential bailout for Spain.

- The 1.1 percent advance in U.S. Retail Sales, followed a revised 1.2 percent increase in August, the best back-to-back showing since late 2010, Commerce Department figures showed yesterday in Washington.


- Furthermore, the risk sentiment was boosted by the Federal Reserve Bank of New York’s Empire State index, which rose to minus 6.2 this month from minus 10.4 in September, the lowest since April 2009.

-Fed's Lacker says best contribution to employment is stable inflation. Fed ability to influence unemployment is limited

- Fed’s Dudley: Monetary policy will be more effective over time.

- Stable Euro Indispensable and part of the Europe growth model: Schaeuble is speaking from Bangkok after the weekend IMF meetings in Tokyo.

- German FM Schaeuble says banking union to split banking and sovereign risk.

-  Rehn: Pact With Greece is expected within Days

-   Germany rules out another "haircut" for Greece

- German Chancellor Merkel says no 'fast solution' of Euro crisis. Germany also made overspending mistakes from 1970s.  Greece must implement reforms before troika report can be completed.  Also stated that she wants all 27 EU members to belong to Euro.

- Greek PM Samaras : Greece will soon get next bailout tranche.

-Spanish 10-year bonds extend drop; yield climbs 16bps to 5.79%

- Regardless of the uncertainty surrounding the deal, signs that Greece may get a fresh aid package prompted big gains in Greek debt.

 -The benchmark Greek 10-year bond yield was down on the day at 17.55 percent, the lowest since August 2011.

- Monti Wants Banks To Directly Access ESM

- Luxembourg FM Frieden says he doesn't see need for Greece to leave Euro zone.

- EU to have unified bank supervision in 2014, according to ECB's Coeure.

-Fed's Bullard says 'Europe is in recession', 'Europe is really struggling' with crisis  , QE3 is 'a state contingent policy'. Not happy with date being in FOMC statement, as he would prefer 'qualitative ' benchmarks not dates.  Calendar date on rates sends pessimistic signal about future. He is 'somewhat more optimistic' than others on outlook.

-Fed's Lacker , Fed would like unwinding of QE to be predictable.

- BoC'S Carney , Capital flows have been pushing up Canada dollar, while keeping long-term interest rates low. Bank of Canada will act to meet 2% inflation goal.

- Aussie Dollar Remained Lower; Kiwi Touched a Month Low

- Futures traders cut their bets that the Australian dollar will strengthen against the U.S. currency, figures from the Washington-based Commodity Futures Trading Commission showed. To elaborate on, the ‘ so-called net longs’ -- slid 38 percent from a week earlier to 39,814 on Oct. 9, the biggest decline since June 5. It was at 89,562 on Sept. 25, the most since April 2011…

- JPY was yesterday's biggest loser, down 0.40% against USD.

- Gold Drop is Largest Since Early July. Gold falls to 2-1/2-week low on stop-loss selling. Silver Completes Double Top.

- Today, most significant news US consumer price index and Euro zone, German ZEW Survey.

Have a nice day !

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