[BREAKING NEWS]

(US) US Fed's Bullard commented that he continued to see US
2012 GDP at 3%. He did note that additional Quantitative
Easing was possible if the US economy deteriorated but that
scenario was unlikely at this time. He forecasted end-2012
US Unemployment Rate at 7.8%. He noted that Europe was in a
grave situation and that the ECB liquidity injections were
not a fundamental solution. He stated that any Greece exit
the euro could occur without much damage to the European
Union but safe haven flows were affecting FX markets.

(US) Q1 PRELIMINARY GDP Q/Q ANNUALIZED: 1.9% V 1.9%E;
PERSONAL CONSUMPTION: 2.7% V 2.9%E.

(US) MAY ADP EMPLOYMENT CHANGE: 133K V 150KE- Prior revised
down from +119K to +113K

How to interpret this?

US Economy continues to show resilience despite global
slowdown and European Sovereign Debt Crisis. Fed. Bullard
commented today that U.S. GDP is likely to reach 3% by the
end of the year and that further Quantitative Easing is on
the table although not likely. Bullard's position is the
reflection of the majority at FOMC and I believe QE3 will
probably not happen this year, especially considering that
the economy has not deteriorated to a point that would
require further Fed action, especially considering the low
bar (NFP 100K) that Bernanke set during his last FOMC Press
Conference.

Hello All,

ECB (European Central Bank) will be rendering its rate decision today, and it will have a pivotal short term impact on the Euro dollar. However, it is widely believed that ECB will keep rate unchanged at 1.00%

Here´s the link to watch the Webcast Live at 8:30am EST – Highly recommended!
http://www.ecb.int/press/tvservices/webcast/html/webcast_120503.en.html

(EU) Fitch commented on Spain that the country to significantly miss its 2012 and 2013 deficit targets and that the Spanish bank aid was a critical step in reducing sector concerns.

(EU) Fitch cautioned that unless Euro Zone found new solutions, the break-up risk rises; and that sovereign ratings were under strong downward pressure. A potential Greek EMU exit could lead to AAA sovereign downgrades (Note: Fitch Asia-Pacific chief previously stated that any Greek exit from EMU would probably lead to sovereign downgrades of Italy, Spain, Ireland, Portugal and Cyprus).

(EU) It was reported Cyprus may require a bailout before the end of the month (June 30th is the regulatory deadline to recapitalize Cyprus Popular Bank). The CPB needs €1.8B to fund its shortfall (approx 10% of GDP). In addition, Cyprus also has €2B of sovereign short-term debt maturing next year. It was suggested that an aid request to the EU may be seen this weekend or next.

(US) Fitch: US, France and UK AAA rating under pressure and respective debt ratios must stabilize fairly soon.

The Netherlands “is affected by the ongoing euro area debt crisis and regional economic weakness”
- Moody’s Investors Service

EUR

Moody’s Investors Service cut credit ratings of ING Groep NV, KBC Groep NV, and Rabobank on concern that the debt crisis makes them vulnerable.
“Dutch banks will face difficult operating conditions throughout 2012 and possibly beyond,” Moody’s said in the statement. The Netherlands “is affected by the ongoing euro area debt crisis and regional economic weakness,” it said.
“If a Greek exit became Moody's central scenario, further rating actions on European banks could well be needed,” it added.
European stocks gained on Friday. The Stoxx Europe 600 Index rose 0.98 per cent to 244.21. Germany’s DAX Index edged higher 1.48 per cent and France’s CAC 40 Index increased 1.82 per cent.

(GR) Greece coalition government expected to be announced later today, coalition to include New Democracy, Pasok and Democratic Left parties - Greek press notes these three parties are currently meeting to form the coalition, with New Democracy’s Samaras as PM. (ES) Bank of Spain (BOS) was said to have asked auditors to delay their reports in order to conduct a more thorough study. Press reported the central bank asked the four auditors (Deloitte, KPMG, PwC and Ernst & Young) to delay their reports until after the summer instead of by July 31st. The auditors are conducting the second phase of an ...