Weekly European Monitor: Hold Your Horses on Greek Exit

-- For specific questions on anything Europe, please contact me at to set up a call.


No Current European Positions in the Hedgeye Virtual Portfolio


Asset Class Performance:

  • Equities:  The STOXX Europe 600 closed up +1.5% week-over-week vs -5.2% last week. Bottom performers: Cyprus -16.4%; Greece -11.8%; Ukraine -5.1%; Turkey -3.7%; Russia (RTSI) -3.4%; Portugal -2.5%. Top performers:  Sweden +3.0%; Ireland +2.6%; Belgium +2.2%; UK +1.6%; Netherlands +1.4%; France +1.3%; Switzerland +1.2%; Germany +1.1%.  
  • FX:  The EUR/USD is down -2.01% week-over-week vs -1.18% last week.  W/W Divergences: SEK/EUR +1.70%, TRY/EUR +1.57%, NOK/EUR +1.28%, GBP/EUR +1.05%, CHF/EUR 0.00%, PLN/EUR -0.23%, RUB/EUR -0.30%, HUF/EUR -0.45%, CZK/EUR -0.52%, RON/EUR -0.73%.
  • Fixed Income:  Greece’s 10YR government bond yield saw the biggest gain, at +91bps week-over-week (vs +461bps last week!) to 30.05%.   Portugal followed at +23bps to 12.31%. France saw the largest contractions w/w, falling -32bps to 2.51%, followed by Belgium -25bps to 3.04% and Italy -14bps to 5.60%.   On a month-over-month basis, the Greek 10YR yield is up a monster +880bps!, while France fell -47bps and Germany fell -34bps over the period.

Weekly European Monitor: Hold Your Horses on Greek Exit - AA. YIELDS



“A mess is a mess is a mess”:

This phrase is how I started many discussions with clients this week pertaining to Europe.  You really have to start with the fact that the Eurozone is a compromised Union of states and you have to think like a Eurocrat to help size potential outcomes for the region. The question isn’t always what “should” happen, but what “will” happen. A few short conclusions:

  • There’s tremendous resolve from Eurocrats to keep the Union alive for their own job security
  • There’s tremendous fear of the unknown, namely the impact of an exit/default of a country and the snowball effect for the rest of the states.
  • There are a tremendous number of hurtles to clear for Europeans to collectively agree on anything (27 EU and 17 Eurozone Parliaments), so short of a massive bank-run that would call for swift action, Eurocrats are likely to continue to drag their feet and butt heads on future policy action (witness the stark divide between the fiscal conservative and anti-Eurobond Germans vs the Pro-Eurobond Italians and French).

Obviously, Greece is the direct and central lynchpin, right here and now. As we’ve made clear in previous work, including last week’s post titled “On Why Greeks Shouldn’t Leave the Eurozone/EU”, there are numerous reasons why Greece is not incentivized to leave the Union (email me at if you need a copy), and Eurocrats have signaled that bailout funds are complicit with the maintenance of austerity targets.


So Greece is essentially holding a loaded gun: on June 17th the Greeks either vote in the anti-austerity party, Syriza, which would result in the country’s exit from the Eurozone and default, or Greeks decide to “play ball” and vote for a pro-austerity party (likely a coalition party headed by New Democracy) to continue to get loan money from its sugar daddy, Troika. We’re by no means suggesting that either outcome leaves Greece in a positive position; however, returning to the incentives and behaviors of Eurocrats, along with the resolve of the Greek people (recent polls suggest 83% want to stay in the Eurozone and with the EUR) we’re attaching a high probability that Greece decides to “play ball” at the polls.


The latest poll for Athens Skai TV now has the anti-austerity Syriza moving up to a new high of 30% of votes versus New Democracy at 26% and Pasok at 15%. Of note is that New Democracy has recently formed a coalition with a splinter group, the Democratic Alliance, also known as DISY. DISY received 2.55% of the popular vote back on May 6, below the 3% threshold needed to be awarded any seats in the Greek legislature. In the opinion polls conducted since the election, they've received an average of 2.03% of the vote. Interestingly, Syriza has led New Democracy in the last 12 opinion polls by an average of 2.35%. With DISY joining New Democracy, this makes the outcome much more even, were the vote held tomorrow.


The topic of the week into and out of the EU Summit was Eurobonds.  Italian PM Monti’s comments were probably the loudest, including that “Europe can have euro bonds soon”, however we still see the Germans carrying the big stick and pulling the cart that is the Eurozone. And for now the Germans are not moving off their positioning. Whether the strong anti-Eurobond position reflects squarely its historic fiscal conservatism, or is more of a bargaining chip to encourage Greeks to continue austerity (versus completely abandoning) is a grey area.  However, what’s clear is that the more Eurocrats speak of Eurobonds, the less likely countries are to stay the path of fiscal consolidation. While we agree that consolidation targets need revision across most of the PIIGS, we view the capitulation of austerity programs across the region as decidedly negative.


There’s a lot of runway before the June 17th Greek election and the next European Summit on June 28-29. We’re of the opinion that headlines will continue to roil capital markets and that the prolonged pain that has been the uncertainty in Europe is here to stay. 




Below is an updated price level chart on the pair with our immediate term TRADE buy level at $1.25 and immediate term TRADE sell level at $1.27. Our models continue to suggest that $1.22 intermediate TREND support is in play, however we expect the next move to be UP. We use the etf FXE to trade the cross. 


Weekly European Monitor: Hold Your Horses on Greek Exit - AA. EUR



Call Outs:

OECD in its semi-annual report said Eurozone GDP is forecast to contract by 0.1% this year, before picking up to 0.9% in 2013.

The International Institute of Finance said Spanish bank loan losses could hit €260B (or €76B to cover losses on top of the €184B they are in the process of raising), with the industry likely to need some €60B in outside help to stay afloat.


Support for Merkel's CDU continues to slide: a survey by Forsa for Stern magazine is the second this week to show a substantial narrowing of the gap between Merkel's CDU and the Social Democrats (SPD). The Forsa poll showed support for the CDU falling four points to 31%, the lowest since October 2011 and down from 38% in February. Support for the SPD rose one point to 27%. However, Forsa chief Manfred Guellner said that there were no signs that Merkel's own popularity had been affected by the recent election setback in NRW.


Spain - Bankia to now ask Madrid for over €15B: Recall that Economy Minister Luis de Guindos told a congressional committee on Wednesday that the state would have to put at least €9B into Bankia.


EFSF CFO says rescue fund unlikely to directly recapitalize banks: EFSF CFO Christophe Frankel said that his fund's permanent successor, the ESM, is unlikely to be allowed to directly recapitalize banks. Recall that some Eurozone countries, along with the IMF, have pushed for this option. He also dismissed concerns that the ESM may not have enough staff and went on to note that a decision regarding the fund's leadership will be made in July.


Germany develops six-point plan for economic growth in Europe: the German government has developed a six-point plan to help promote growth in the Eurozone. The plan includes the creation of special economic zones with lower tax rates and fewer regulations to help peripheral states. It also includes an easing of labor market regulations and the creation of state agencies to sell assets.


Portugal - Opposition leader says Portugal needs more time on budget goals: Antonio Jose Seguro, the leader of the opposition Socialists, said that Portugal will need at least an extra year to reduce its budget deficit to the target established under its €78B bailout. Recall that Portugal is expected to post a budget deficit of 4.5% of GDP this year, while it must be cut to 3% by 2013. While Seguro criticized the strength and pace at which austerity measures are being implemented in Portugal, he also said that he did not believe that the country would need additional bailout funds. He also highlighted his support for Eurobonds and changing the statutes of the ECB to boost its lending to troubled countries.


CDS Risk Monitor:


Week-over-week CDS were mixed across the main countries we track.  Ireland saw the largest gain in CDS w/w at +24bps to 707bps, followed by Portugal +11bps to 1195bps. The biggest declines came from Spain -17bps to 536bps, France -15bps to 204bps, and Italy -9bps to 508bps.  


Weekly European Monitor: Hold Your Horses on Greek Exit - AA. CDS A


Weekly European Monitor: Hold Your Horses on Greek Exit - AA. CDS B


Data Dump:

PMI Manufacturing

Eurozone 45 MAY (exp. 46) vs 45.9 APR

Germany 45 MAY (exp. 46.8) vs 46.2 APR

France 44.4 MAY (exp. 47) vs 46.9 APR


PMI Services

Eurozone 46.5 MAY (exp. 46.7) vs 46.9 APR

Germany 52.2 MAY (exp. 52) vs 52.2 APR

France 45.2 MAY (exp. 45.7) vs 45.2 APR


Eurozone PMI Composite: 45.9 MAY (exp. 46.6) vs 46.7 APR

Eurozone Construction Output -3.8% MAR Y/Y vs -16.3% FEB   [12.4% MAR M/M vs -10.4% FEB]


Germany IFO Business Climate 106.9 MAY (exp. 109.4) vs 109.9 APR

Germany IFO Current Assessment 113.3 MAY (exp. 117.1) vs 117.5 APR

Germany IFO Expectations 100.9 MAY (exp. 102) vs 102.7 APR

Germany GfK Consumer Confidence Survey 5.7 JUN (exp. 5.6) vs 5.7 MAY


Germany Q1 GDP Final 1.2% Y/Y and 0.5% Q/Q [UNCH vs previous estimate]

  • Private Consumption 0.4% vs -0.2% in Q4
  • Exports 1.7% vs -1.5% in Q4
  • Imports 0.0% vs -0.8% in Q4
  • Construction Investment -1.3% vs 1.9% in Q4
  • Government Spending 0.2% vs 0.6% in Q4
  • Capital Investment -1.1% vs 1.1% in Q4
  • Domestic Demand -0.3% vs 0.2% in Q4

France Consumer Confidence 90 MAY (exp. 88) vs 89 APR

France Own-Company Production Outlook -4 MAY vs -5 APR

France Production Outlook Indicator -29 MAY vs -14 APR

France Business Confidence Indicator 93 MAY vs 95 APR


UK Bank of England: The nine members of the Bank's Monetary Policy Committee voted 8-1 in favor of ending the asset purchases at a total of £325B, with only David Miles keeping up his call for another £25B dose of quantitative easing.

UK Retail Sales -1.1% APR Y/Y (exp. 1.0) vs 3.1% MAR   [-2.3% APR M/M (exp. -0.8%) vs 2% MAR]


UK RPI 3.5% APR Y/Y vs 3.6% MAR

UK CPI 3.0% APR Y/Y (exp. 3.15) vs 3.5% MAR


UK 1Q GDP Preliminary -0.1% Y/Y (exp. 0.0%) vs Initial estimate of 0.0%  [-0.3% M/M (exp. -0.2%) vs Initial estimate of -0.2%]

  • Private Consumption 0.1% Y/Y (exp. 0.3%) vs 0.4% in Q4
  • Government Spending 1.6% Y/y (exp. 0.0%) vs 0.5% in Q4
  • Gross Fixed Capital Formation -0.3% Y/Y (exp. -0.5%) vs -0.6% in Q4
  • Exports 0.1% Y/Y (exp. -0.3%) vs 1.6% in Q4
  • Imports 0.4% Y/Y (exp. 0.1%) vs 0.9% in Q4
  • Total Business Investment 14.2% Y/Y (exp. 9.2%) vs 1.6% in Q4


Italy Consumer Confidence 86.5 MAY (exp. 89.5) vs 88.8 ARP

Italy Retail Sales 1.7% MAR Y/Y vs 0.5%

Italy Hourly Wages 1.4% APR Y/Y vs 1.2% MAR


Spain Producer Prices 3.1% APR Y/Y vs 4.5% MAR

Spain Mortgages on Houses -42% MAR vs -47.1% FEB


Ireland PPI 2.8% APR Y/Y vs 2.6% MAR

Ireland Property Prices -16.4% APR Y/Y vs -16.3% MAR


Switzerland Exports -0.9% APR M/M vs -2.4% MAR

Switzerland Imports 2.6% APR M/M vs 5.9% MAR

Austria Industrial Production 0.8% MAR Y/Y vs -0.2% FEB


Finland Unemployment Rate 8.4% APR vs 8.5% MAR

Norway 1Q GDP (Mainland) 1.1% Q/Q vs 0.8% in Q4

Sweden Unemployment Rate 7.8% APR vs 7.7% MAR


Slovakia Unemployment Rate 13.4 APR vs 13.7% MAR

Poland Unemployment Rate 12.9% APR vs 13.3% MAR

Poland Retail Sales 5.5% APR (exp. 9.3%) vs 10.7% MAR

Turkey Foreign Tourist Arrivals -5.3% APR Y/Y vs -9.7% MAR


Interest Rate Decisions:

(5/25) Latvia Refinancing Rate UNCH at 3.50%



The Week Ahead:


Monday: May UK Nationwide House Prices; May Italy Business Confidence

Tuesday: May Germany CPI; Apr. UK Import Price Index (May 29-30); May UK CBI Reported Sales; Apr. Spain Retail Sales, Budget Balance YtD

Wednesday: May Eurozone Consumer Confidence – Final, Business Climate Indicator, Economic Confidence, Industrial Confidence, Services Confidence; Apr. Eurozone M3 Money Supply; Apr. Germany Retail Sales; May UK GfK Consumer Confidence Survey; Apr. UK Net Consumer Credit, Net Lending Sec. on Dwellings, Mortgage Approvals, M4 Money Supply; Apr. France Jobseekers; May Spain CPI – Preliminary; Apr. Italy PPI


Thursday: May Eurozone CPI Estimate; May Germany Unemployment Data; Apr. France Producer Prices, Consumer Spending; Mar. Spain Housing Permits, Current Account; May Italy CPI – Preliminary; Mar. Greece Retail Sales


Friday: May Eurozone PMI Manufacturing - Final; Apr. Eurozone Unemployment Rate; May Germany PMI Manufacturing – Final; May UK PMI Manufacturing; May France PMI Manufacturing – Final; Spain PMI Manufacturing; May Italy PMI Manufacturing, New Car Registration, Budget Balance; Apr. Italy Unemployment Rate - Preliminary; 1Q Italy Unemployment Rate; Greece PMI Manufacturing


Extended Calendar Call-Outs:


29 May: Meeting of General Affairs Council (GAC)


31 May: Ireland – compromise may be reached by the time Irish voters make their judgment on the treaty in a referendum


10 June: France – first round of parliamentary elections


17 June: Greece – probable date for next general election, France – second round of parliamentary election


28-29 June: EC meets to discuss Institutional Affairs, Summit of EU leaders, aim to formally sign off on growth proposals


30 June:  Deadline for EU Banks to meet €106B capital target/the 9% Tier 1 capital ratio, Iceland – Presidential election


1 July:  ESM to come into force


5 July: ECB governing council meeting


19 July: ECB governing council meeting


18-19 October: Summit of EU Leaders



Matthew Hedrick

Senior Analyst


The Economic Data calendar for the week of the 28th of May through the 1st of June is full of critical releases and events. Attached below is a snapshot of some (though far from all) of the headline numbers that we will be focused on.



Net Long: SP500 Levels, Refreshed

POSITIONS: Long Healthcare (XLV), Short Industrials (XLI) and Basic Materials (XLB)


On red this morning, I moved the Hedgeye Portfolio to 9 LONGS, 4 SHORTS. Since the intermediate-term TREND remains bearish, that’s the best I can do here – get net long by managing my short book up/down aggressively.


Across risk management durations, here are the lines that matter to me most: 

  1. Intermediate-term TREND resistance = 1369
  2. Immediate-term TRADE resistance = 1336
  3. Immediate-term TRADE support = 1316 

That 1316 line is a stealth line of support (yesterday it was resistance). That’s going to be my line in the sand right now in determining my net exposure. Seems simple, because it is – I like to be able to make decisions that are process based. It’s just math.


I’ll either tighten up my net exposure closer to 1336 (overbought), or do so on a break below 1316.


For now, I wait and watch.


Enjoy your weekend,



Keith R. McCullough
Chief Executive Officer


Net Long: SP500 Levels, Refreshed - SPX

Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.46%
  • SHORT SIGNALS 78.35%


Slowing growth is real but other factors may be exaggerating the issue.



We’ve seen this Macau movie before.  The sentiment pendulum swings too far, this time to the negative.  However, there are some additional, more transitory factors to explain May’s disappointing revenues thus far.  Don’t get me wrong:  we’ve been on the growth slowing theme for a while and have been mostly negative on LVS, WYNN, and MGM over the past few months.  So it’s not like we’re trying to justify Buy ratings.


Here are some thoughts on May:

  • Low hold:  We think low hold may have impacted YoY growth by around 5%.  Our unadjusted growth projection was 8-12%.
  • Shorter Golden Week:  Not only was Golden Week only 7 days (last year it was 10) but it started in April.  So May 2012 didn’t get as big a pop from the GW celebration.
  • Calendar:  May 2012 was down 1 Sunday from May 2011.

Our conclusion is that May was actually not that bad.  In fact, we think June could rebound to growth of 17-22%.  Given how low sentiment and the stocks have gone in the past month, a rebound like this would be a big catalyst.


We like LVS and WYNN here for a trade.  LVS’s market share will grow off the current 17.5%, evidence of which could come as soon as Monday when we get the weekly numbers.  Wynn Macau may have been hurt the most by low hold in May and we believe their market share was probably in the 12-13% range assuming normalized hold versus the 11.1% generated MTD. 

Optimistic Bias

This note was originally published at 8am on May 11, 2012. INVESTOR and RISK MANAGER SUBSCRIBERS have access to the EARLY LOOK (published by 8am every trading day) and PORTFOLIO IDEAS in real-time.

“The optimistic bias may well be the most significant of the cognitive biases.”

-Daniel Kahneman


If I had to pick three books that have been the most influential in my learning process in the last few years, they would be: 1. This Time Is Different (Reinhart & Rogoff) 2. The Road To Serfdom (Hayek), and 3. Thinking, Fast and Slow (Kahneman).


The only way out of getting caught off-sides by the groupthink of our profession is to get into books. I think it’s critical to remove your mind from the daily dose of hope and get real with what’s not only happened across generations of economic history, but what’s developing in terms of what we’re learning about ourselves.


I call this being Duration Agnostic in my risk management approach. Long-term mean reversions in big Global Macro data and immediate-term behavioral factors in our heads matter, all at the same time. Embrace Uncertainty.


Back to the Global Macro Grind


If you loved the US stock market 7 trading days ago, you’re going to get married to it this morning. Or are you? Do you have to keep buying on the way down? When the facts change, do you? I don’t marry markets.


I can’t imagine anyone telling me with a straight face that they thought that JPM reporting a $2B loss on the eve of Durbin taking the Volcker Rule implementation to the Senate floor was either expected or reason to be optimistic. With both JPM and the Financials (XLF) having already broken my intermediate-term TREND lines of $41.14 and $14.99 support, respectively, timing here matters.


I’m not dog-piling bad news. In fact, from a leadership perspective, Dimon showed his stripes as being the real deal in terms of transparency and accountability last night. That doesn’t make this a ‘buy the Financials’ day though (see Chart of The Day).


On the margin, the fundamental news for the US Financials has been worsening for at least 2 months. As one of our top performing Risk Manager clients asked last night – “So, what do you think is already priced in?”


The short answer is I don’t know. We let the market tell us what to do next.


The more well rounded research and risk managed answer is something that our Managing Director of everything Financials, Josh Steiner, and I will host a conference call on at 830AM EST (email if you’d like to join).


What else do we know?

  1. The concept of the US “de-coupling” is as loose as Keynesian economic forecasting
  2. Globally Interconnected risk, across currencies, countries, and commodities, continues to flag bearish
  3. Whatever your bottom-up view is on the Financials, it has to be considered within the context of the top-down

We do Top-Down in 2-ways:

  1. Global Macro Top Down
  2. Industry Top Down

On the Global Macro front, here’s what I see across currencies, countries, and commodities right now:

  1. US Dollar Index up for the 8thconsecutive day to $80.20; EUR/USD moves back into a Bearish Formation
  2. US Dollar Index immediate-term correlations: SP500 = -0.91, EuroStoxx600 = -0.95, CRB Commodities Index = -0.95
  3. US Dollar Index  immediate-term correlation to the US Financials Sector ETF (XLF) = -0.92

In other words, the Correlation Risk is moving towards -1.0, again – and if you don’t remember how this movie tends to climax, you are definitely hostage to a serious Optimistic Bias. This is not a time to be recklessly long on a gross or net basis.


The Correlation Risk to the world’s reserve currency doesn’t always matter. But when you are in the soup like this, it’s basically all that matters. That’s the lesson of the 2008, 2010, 2011 Q1 peaks to the ultimate draw-down lows established sometime in Q3.


Valuation is not a catalyst right now. Events are. From a Top Down Industry perspective for the Financials, here’s what’s next:

  1. Morgan Stanley’s pending multiple notch ratings downgrade (May)
  2. Volcker Rule implementation (July)
  3. Europe (ongoing)

Notwithstanding that the US Money-Center banks are going to have to also report earnings in July – and that one of the main drivers of those cash earnings, Net Interest Margin (NIM), has seen the Yield Spread (10yr minus 2yr yield) compress by 21% since it topped in mid-March, there’s a lot to think about here.


If every single major Global Equity market hadn’t already put in a lower long-term high in late-Feb to early April, I would answer my client’s question with a maybe (in whether or not I think this is all priced in). But they have. So my answer is not maybe. You don’t pay me to be optimistic – you pay me to be realistic about real-time risk.


My immediate-term support and resistance ranges for Gold, Oil (Brent), US Dollar Index, Financials (XLF), JP Morgan (JPM), and the SP500 are now $1577-1637, $109.71-113.87, $79.42-80.39, $13.87-14.99, $36.83-41.14, and 1341-1367, respectively.


Best of luck out there today,



Keith R. McCullough
Chief Executive Officer


Optimistic Bias - Chart of the Day


Optimistic Bias - Virtual Portfolio


TODAY’S S&P 500 SET-UP – May 25, 2012

As we look at today’s set up for the S&P 500, the range is 48 points or -2.02% downside to 1294 and 1.61% upside to 1342. 












    • Down from the prior day’s trading of 643
  • VOLUME: on 5/24 NYSE 796.46
    • Decrease versus prior day’s trading of -7.71%
  • VIX:  as of 5/24 was at 21.54
    • Decrease versus most recent day’s trading of -3.54%
    • Year-to-date decrease of -7.95%
  • SPX PUT/CALL RATIO: as of 05/24 closed at 1.24
    • Down from the day prior at 1.83 


CLIFF – first time we have written about the fiscal cliff in a while - that’s because it’s the 1st time we have had a quantitative signal to do so – short rates (2yr UST yields) are starting to hint at a breakout (0.28% = TRADE support). If we keep up w/ these ridiculous rumors and the denominator (GDP) keeps slowing, that US deficit/GDP ratio comes back on the table, faster. 

  • TED SPREAD: as of this morning 38
  • 3-MONTH T-BILL YIELD: as of this morning 0.09%
  • 10-Year: as of this morning 1.77
    • Decrease from prior day’s trading at 1.78
  • YIELD CURVE: as of this morning 1.47
    • Down from prior day’s trading at 1.48 

MACRO DATA POINTS (Bloomberg Estimates):

  • Univ. of Michigan releases confidence index for May, Est. 77.8 (prior 77.8), 9:55am
  • USDA issues monthly food inflation data, 10am
  • Baker Hughes rig count, 1pm 


    • Comment period ends on proposed Federal Reserve rule for determining whether a company is “predominantly engaged in financial activities”
    • House, Senate meet in pro forma sessions
    • CFTC holds closed meeting on enforcement matters, 10am     


  • Morgan Stanley said to tell brokers it will fix Facebook orders
  • Merkel considers debt-sharing plan as Monti says she’s isolated
  • SEC staff said to end Lehman probe without finding fraud
  • JPMorgan gave risk oversight to museum head who sat on AIG board
  • Delphi open to more acquisitions after buying supplier for almost $1b
  • Dell said to weigh buying Quest to add computer-management tools
  • Lehman said to reach deal with banks to buy rest of Archstone
  • NBCUniversal is in talks to buy Microsoft’s stake in
  • Fox, NBC, CBS sue Dish over ad skipping video-on-demand service
  • Gupta prosecutors try to show links with wiretaps, phone records
  • French 10-yr bond yield declines to record low of 2.422%
  • Money funds open to deal w/ SEC, WSJ says
  • U.S. markets closed on Monday for Memorial Day holiday
  • U.S. Jobs, Chinese Output, Cannes: Week Ahead May 26-June 2 


    • Mentor Graphics (MENT) 8am, $0.25 


  • Copper Traders Extend Bearish Streak as Prices Drop: Commodities
  • Oil Rises on Euro-Bond Speculation to Trim Fourth Weekly Drop
  • Copper Advances as European Leaders May Contain Debt Crisis
  • Gold Climbs in London as Buyers Take Advantage of Price Drop
  • Corn Climbs in Chicago as Dry Weather Threatens Crops in Midwest
  • Robusta Coffee Gains to Eight-Month High on Rising Global Demand
  • China’s Cotton Planting Drops 10% as Labor Costs Increase
  • Nigeria Losing Top Oil Buyer U.S., Turns to Asia: Energy Markets
  • Palm Oil Climbs as 10% Fall in Prices This Month Lures Investors
  • Trade Deal Spurs Flow of Arbitrage North Sea Oil to South Korea
  • Copper Set to Extend Losses to $7,100 a Ton: Technical Analysis
  • Balrampur Says Mills Losing Money on Controls: Corporate India
  • China Zinc Smelters Likely to Further Cut Output, Wang Says
  • Copper Extends Bearish Streak on Price Drop
  • Soybean Imports by Japan Seen Dropping to 43-Year Low on Yen
  • Rubber Gains First in Three Days on Thailand Purchase Plans
  • Indonesia’s Nickel-Ore Exports Seen Dropping 20% in Second Half           










RUMORS – back to the same playbook that has already killed European equity markets and, to a large degree, killed US inflows into Equities too – people don’t trust this casino, and they probably shouldn’t. Monti says that there is a consensus amongst countries that can’t fund on Eurobonds – I bet. But Germany doesn’t need a consensus.






CHINA – 3rd consecutive day of selling in the Chinese stock market after snapping our critical TREND line of 2373 support; markets don’t think growth is slowing at a slower rate there yet – it’s consensus (and has been), but that doesn’t mean consensus can’t be right for another few months. Our models have China’s growth slowing at a slower rate in Q3/Q4, not in Q2.










The Hedgeye Macro Team

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