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EU summit to tackle banking union; Spain and Greece on watch...

Friday, October 19, 2012 3:53 AM GMT

Good Morning ,


- EU summit to tackle banking union; Spain and Greece on watch

- It is the fourth time EU leaders have met this year and the 22nd summit held since the crisis erupted in Greece in late 2009. Yet diplomats expect no breakthroughs at the two-day gathering, with the agenda focused instead on longer-term efforts to retool the region's banks and economies. The aim is to reach agreement on joint banking supervision first, with the ECB playing the lead role.

- EU summit: Broken banks put euro zone in federal mood.

- Finnish PM Katainen said any financial assistance for Spain would stop short of a full bailout

- Germany's Merkel: No Decisions on EMU to Be Taken At Summit.

- All EU leaders soften call to complete oversight mechanism in 2012; commit to ECB oversight legislative deal by end of year.

- Europe stocks rose to 16-month high on Thursday. European stock markets rise to the highest level since early June 2011 on Thursday, after a volatile trading session where a mixed bag of U.S. data and earnings reports from heavyweights sent bourses swinging between gains and losses.

- UK economy still ailing, warns Bank of England insider. MPC's David Miles foresees only sluggish growth in Britain. Speaking to Guardian, Miles said: "The state of the economy is not as good as I had hoped a year or so back, I must admit. The last 18 months have seen no significant growth".

-  Spain on Thursday auctioned 4.6 billion euro ($6.03 billion) of government bonds, news reports said. The total exceeded the top end of the Treasury's target range at 4.5 billion euro as borrowing costs fell amid continued expectations the country will soon seek a full bailout, which would allow the European Central Bank to launch its bond-buying program.

- China at 'End of an Era,' but No Hard Landing. China's economy slowed for the seventh-straight month in the third quarter to 7.4%, down 0.2% from the previous quarter, and its slowest rate since the first quarter of 2009.

-The Federal Reserve Bank of Philadelphia’s general economic index rose to 5.7 in October from minus 1.9 in September. Manufacturing in the Philadelphia region expanded in October for the first time in six months, a sign the industry may be starting to stabilize.

- Cyprus said it expected talks to start with lenders on badly needed aid next week, as S&P pushed it deeper into junk territory, cutting Cyprus' credit rating 3 notches from BB to B, with a "negative" outlook

- Greece and the troika have neared an agreement over an austerity program

- Due to China’s slowest GDP growth, sluggish US labor data, poor expectations for substantial decisions on the EU Summit and…Google, currency traders scaled back their appetite for risk.

- US dollar was yesterday's top performer, gaining at least 0.13% vs. all majors. USD up 0.36% vs. EUR,  0.41% vs. JPY and 0.74% vs. CAD. 


- Fed's agency securities unchanged at $82.7 bln. Fed's holdings of treasuries rise $5.3 bln to $1.66 trillion.

- JP Morgan says fiscal cliff to cut 1 point from 2013 GDP. Sees U.S.  economy growing   1% in 1Q 2013 and 1.5% in 2Q.

- The yen plumbed five-month lows on the euro and a two-month trough on the dollar on Friday as investors grew confident the Bank of Japan would ease further next week, making the yen more attractive as a funding currency for carry trades.

- RBA sees cash deficit at A$3,512 Million.

- JPY and CAD were the biggest losers in yesterday's trading. JPY down 0.35%,  CAD down 0.41% vs. USD.


Have a nice weekend !


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